ADA Price Prediction: Bears Eye Sub-$0.300 on Fed and IOHK Numbers

Key Insights:

• ADA joined the broader crypto in the negative territory on Friday, falling by 0.95% to end the day at $0.312.
• Risk-off sentiment stemming from US wholesale inflation figures left ADA on the back foot.
• The technical indicators remain bearish, signaling a possible return to sub-$0.300.

On Friday, ADA fell by 0.95%. Partially reversing a 1.61% gain from Thursday, ADA ended the day at $0.312. Notably, ADA fell to sub-$0.310 for the third consecutive session.

A bullish morning saw ADA rise to a late morning high of $0.317. Coming up short of the First Major Resistance Level (R1) at $0.318, ADA slid to a late low of $0.309. Finding support at the First Major Support Level (S1) at $0.0309, ADA returned to $0.312 to reduce the deficit for the day.

US Economic Indicators Overshadow Cardano Network Updates

On Friday, US economic indicators delivered more Fed pivot uncertainty. US wholesale inflation came in hotter-than-forecasts, weighing on ADA, the broader crypto market, and the NASDAQ Composite Index.

The annual wholesale inflation rate softened from 8.1% to 7.4%. While softer, economists forecast a rate of 7.2%. In November, the producer price index rose by 0.3% versus a forecasted 0.2%.

While US Consumer Sentiment and sub-indexes provided support, the latest producer price index figures suggest that inflation pressures will likely linger over the near term.

The latest stats and the NASDAQ Composite Index, which fell by 0.74%, overshadowed Cardano network updates.

On Friday, Input Output HK (IOHK) released the weekly development report for December 9, 2022. Statistics to date included,

• 108 projects launched on the Cardano network, unchanged from the previous week.
• Projects building on the Cardano network totaled 1,151, up by two from the previous week.
• Plutus scripts totaled 4,347, of which 400 were Plutus V2 scripts. Plutus scripts stood at 3,920 on November 30.

Before the Vasil hard fork, the number of projects launched on Cardano had stood at 98, with 1,100 projects building on the Cardano network.

Other stats included 56.3 million transactions (PW: 55.8m), 7.2 million native tokens (PW: 7.11 million), and 66,530 token policies (PW: 66,011).

The latest figures were disappointing for investors looking for a pickup in projects. However, the markets are still anticipating an influx in the New Year.

ADA Price Action

This morning, ADA was flat at $0.312. A range-bound morning saw ADA fall to an early low of $0.311 before steadying.

Technical Indicators

ADA needs to move through the $0.313 pivot to target the First Major Resistance Level (R1) at $0.316 and the Friday high of $0.317. A return to $0.316 would signal a bullish session. However, ADA would need the broader market to support a breakout afternoon session.

In the event of an extended rally, the bulls will likely take a run at the Second Major Resistance Level (R2) at $0.321. The Third Major Resistance Level (R3) sits at $0.329.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.308 in play. However, barring a risk-off-fueled sell-off, ADA should avoid sub-$0.300. The Second Major Support Level (S2) at $0.305 should limit the downside. The Third Major Support Level (S3) sits at $0.297.

This morning, the EMAs and the 4-hourly candlestick chart (below) sent a bearish signal.

ADA sat below the 50-day EMA, currently at $0.315. The 50-day EMA fell back from the 100-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

A move through the 50-day EMA ($0.315) would support a breakout from R1 ($0.316) to target the 100-day EMA ($0.318) and R2 ($0.321). However, failure to move through the 50-day EMA ($0.315) would leave S1 ($0.308) in view.