ADA Price Prediction: Sub-$0.380 in Play on the SEC and the Fed

Key Insights:

• ADA fell by 1.25% on Wednesday, ending the session at $0.394.
• Hawkish FOMC member commentary overshadowed Fed Chair Powell’s market-friendly speech from Tuesday, with SEC chatter adding to the bearish mood.
• The technical indicators remain bullish, supporting a run at $0.450.

ADA fell by 1.25% on Wednesday. Partially reversing a 4.45% rally from Tuesday, ADA ended the day at $0.394. ADA wrapped up the day at sub-$0.400 for the fifth consecutive session.

A choppy start to the day saw ADA rise to an early high of $0.403. Coming up short of the First Major Resistance Level (R1) at $0.406, ADA slid to a late afternoon low of $0.385. ADA fell through the First Major Support Level (S1) at $0.387 before a partial recovery to end the day at $0.394.

Network Updates Take a Backseat on Hawkish Fed Chatter and SEC Moves

On Wednesday, Input Output HK (IOHK) announced an upcoming Cardano upgrade set for Saturday, saying,

“In collaboration with Cardanostiftung, an update proposal was submitted yesterday to upgrade the Cardano pre-production environment to protocol v8, which will take effect on Saturday, February 11.”

IOHK added that the update would support final-stage testing ahead of the SECP upgrade on the mainnet on February 14, 2023. However, investors brushed aside the latest upgrade news, with Fed chatter and regulatory activity weighing on investor appetite.

Following Fed Chair Powell’s crypto market-friendly speech on Tuesday, FOMC members Williams and Waller hit riskier assets on Wednesday.

FOMC member John Williams talked of a strong labor market and the need to do more to bring inflation to target. Williams reportedly said that a peak rate of 5%-5.25% is still a reasonable view that contrasted with Fed Chair Powell’s hope of rates staying below 5%.

FOMC member Christopher Waller reportedly spoke of needing to keep monetary policy tighter for longer than anticipated.

The hawkish chatter and Alphabet Inc. (GOOGL) sent the NASDAQ Index and the crypto market into the red.

However, SEC news added to the bearish mood and weighed on investor appetite this morning. Reports of the SEC investigating Kraken for the sale of unregistered securities and rumors of the SEC planning to ban crypto staking added to the bearish mood.

Today, EMURGO and Cardano hard fork news would draw interest. However, a lack of updates from IOHK would leave ADA in the hands of the NASDAQ Index and the broader crypto market. US jobless claims, Fed chatter, and regulatory news will be focal points.

ADA Price Action

This morning, ADA was down 2.79% to $0.383. A mixed start to the day saw ADA rise to an early high of $0.396 before sliding to a low of $0.378. ADA fell through the First Major Support Level (S1) at $0.385.

Technical Indicators

ADA needs to move through S1 and the $0.394 pivot to target the First Major Resistance Level (R1) at $0.403. A return to $0.400 would support a bullish session. However, Cardano network updates and the broader crypto market would need to provide support.

In the event of a breakout, ADA would likely test the Second Major Resistance Level (R2) at $0.412. The Third Major Resistance Level (R3) sits at $0.430.

Failure to move through S1 and the pivot ($0.385) would leave the Second Major Support Level (S2) at $0.376 in play. Barring an extended broad-based crypto sell-off, ADA should avoid sub-$0.375 and the Third Major Support Level (S3) at $0.358.

This morning, the EMAs and the 4-hourly candlestick chart (below) sent mixed signals.

ADA sat at the 100-day EMA, currently at $0.383. The 50-day EMA narrowed to the 100-day EMA, while the 100-day EMA widened from the 200-day EMA, delivering a bullish signal.

A move through the S1 would bring the 50-day EMA ($0.392) and R1 ($0.403) into play. However, a pullback from the 100-day EMA ($0.383) would give the bears a run at S2 ($0.376). A move through the 50-day EMA would send a bullish signal.