ADA Price Prediction: Bears Target Sub-$0.340 on the SEC and Fed

Key Insights:

• ADA continued the current bearish trend on Monday, falling by 1.37% to end the day at $0.359.
• Investor angst over the SEC and its latest moves on staking and stablecoins left ADA in the red.
• The technical indicators turned bearish, supporting a return to sub-$0.340.

ADA fell by 1.37% on Monday. Following a 1.09% loss on Sunday, ADA ended the day at $0.359. ADA revisited sub-$0.350 for the first time since January 20.

A mixed start to the day saw ADA rise to an early high of $0.366. Coming up short of the First Major Resistance Level (R1) at $0.372, ADA slid to a late afternoon low of $0.345. ADA briefly fell through the First Major Support Level (S1) at $0.358 and the Second Major Support Level (S2) at $0.352 before a partial recovery to end the day at $0.359.

SEC Move on Paxos and BUSD Overshadows Network Sentiment

It was a quiet Monday session, with no Cardano network updates to distract investors from the crypto news wires.

Following the news of Kraken ceasing US staking services as part of an SEC settlement, SEC plans to sue Paxos hit the crypto market and buyer appetite. The SEC is preparing to sue Paxos for the issuance and listing of Binance USD (BUSD). The SEC cited that the firm violated investor protection laws.

Paxos released a statement in response to the Wells notice, saying,

“Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws.”

Additionally, Paxos said it would resort to litigation if necessary.

With the SEC targeting staking and stablecoins, the SEC moves have delivered significant regulatory uncertainty. Significantly, the SEC is turning the screw at a time when crypto market participants are looking to restore confidence in the wake of the FTX bankruptcy.

COTI launched the DJED algorithmic stablecoin in late January, with EMURGO due to launch USDA on the Cardano network shortly.

The Day Ahead

Updates on the Cardano SECP upgrade will draw interest. The upgrade, dubbed the St Valentine’s upgrade, will occur today.

However, while network updates will draw interest, SEC news and market sentiment toward Fed monetary policy will likely be the key drivers. Further SEC regulation by enforcement will test investor appetite.

This afternoon, the US CPI Report will also influence market risk sentiment. An unexpected pickup in US inflationary pressure would likely weigh on the NASDAQ Index and the crypto market.

ADA Price Action

This morning, ADA was flat at $0.359. A mixed start to the day saw ADA rise to an early high of $0.360 before falling to a low of $0.355.

Technical Indicators

ADA needs to avoid a fall through the $0.357 pivot to target the First Major Resistance Level (R1) at $0.368. A return to $0.365 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 $0.378 and $0.380. The Third Major Resistance Level (R3) sits at $0.399.

A fall through the pivot ($0.357) would bring the First Major Support Level (S1) at $0.347 into play. Barring another extended broad-based crypto sell-off, ADA should avoid sub-$0.340 and the Second Major Support Level (S2) at $0.336. The Third Major Support Level (S3) sits at $0.315.

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

ADA sat below the 200-day EMA, currently at $0.363. After the Sunday bearish cross, the 50-day EMA pulled further back from the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, delivering bearish signals.

A move through the 200-day EMA ($0.363) and R1 ($0.369) would support a run at the 50-day ($0.371) and 100-day ($0.374) EMAs. However, failure to move through the 200-day EMA ($0.363) would support a fall through S1 ($0.347) to bring S2 ($0.336) into view. A move through the 50-day EMA would send a bullish signal.