Key Insights:
- ADA tumbled by 8.12% on Thursday, marking a fifth loss from six sessions.
- Regulatory risk sent the crypto market into the red on news of Kraken ceasing US crypto staking services.
- The technical indicators turned bearish, supporting a return to sub-$0.350.
ADA tumbled by 8.12% on Thursday. Following a 1.25% loss on Wednesday, ADA ended the day at $0.362. ADA visited sub-$0.360 levels for the first time since January 25.
A choppy start to the day saw ADA rise to an early high of $0.396. Coming up short of the First Major Resistance Level (R1) at $0.403, ADA slid to a late low of $0.355. ADA fell through the First Major Support Level (S1) at $0.385 and the Second Major Support Level at $0.376. However, finding support at the Third Major Support Level (S3) at $0.358, ADA ended the day at $0.362.
SEC and Kraken News Overshadows Bullish Price Signals
On Thursday, there were no material network updates from Input Output HK (IOHK) to provide direction. The lack of updates left ADA in the hands of the broader crypto market and the crypto news wires.
News of Kraken settling with the SEC and ceasing crypto staking services for US customers sent the crypto market into the deep red.
Overnight on Wednesday, rumors of the SEC planning to ban crypto staking caught investors off-guard. Thursday’s news affirmed the SEC’s plans to target crypto staking. The ADA loss came despite the bullish sentiment toward upcoming Cardano network upgrades.
According to GitHub, Cardano is outmuscling other leading blockchains, including Decentraland (MANA), Ethereum (ETH), and Polkadot (DOT). The latest figures come ahead of the Valentine upgrade.
Today, the IOHK Weekly Development Report will draw interest. A sharp increase in projects on the Cardano network would deliver price support. EMURGO and Cardano hard fork news will also need monitoring. However, SEC chatter and regulatory activity will likely remain the focal point. Reports of the SEC targeting other US exchanges for crypto staking services would test buyer appetite.
In the afternoon session, US economic indicators and Fed chatter also need consideration. Michigan consumer sentiment figures are due out, with FOMC member Waller speaking late in the US session.
ADA Price Action
This morning, ADA was down 0.83% to $0.359. A mixed start to the day saw ADA rise to an early high of $0.364 before falling to a low of $0.357.
Technical Indicators
ADA needs to move through the $0.371 pivot to target the First Major Resistance Level (R1) at $0.387 and the Thursday high of $0.396. A return to $0.380 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 $0.453.
Failure to move through the pivot ($0.371) would leave the First Major Support Level (S1) at $0.346 in play. Barring another extended broad-based crypto sell-off, ADA should avoid sub-$0.340 and the Second Major Support Level (S2) at $0.330. The Third Major Support Level (S3) sits at $0.289.
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. The 50-day EMA closed in on 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) would support a run at the 100-day ($0.382) and 50-day ($0.387) EMAs and R1 ($0.387). However, failure to move through the 200-day EMA ($0.363) would give the bears a run at S1 ($0.346). A move through the 50-day EMA would send a bullish signal.
