ADA Price Prediction: Bulls Await USDA Launch to Target $0.420

Bob Mason
Published: Feb 2, 2023, 07:11 GMT+00:00

Following a bullish Wednesday, ADA was on the move this morning. Project numbers and stablecoin news remain key drivers.

ADA technical analysis - FX Empire.

Key Insights:

  • ADA rose by 1.79% on Wednesday to end the day at $0.397.
  • There were no network updates to provide direction, leaving the Fed and the broader crypto market to provide support.
  • The technical indicators remain bullish, supporting a return to $0.450.

ADA rose by 1.79% on Wednesday. Following a 4.56% rally on Tuesday, ADA ended the day at $0.397. ADA revisited $0.400 for the second time since November 8.

After a range-bound morning, ADA fell to a late afternoon low of $0.372. Finding support at the First Major Support Level (S1) at $0.372, ADA rallied to a late high of $0.402. However, coming up short the First Major Resistance Level (R1) at $0.404, ADA eased back to end the day at $0.397.

Fed Chair Powell and the NASDAQ Index Delivered Support

On Wednesday, there were no Input Output HK (IOHK) updates to provide direction. The lack of network news left Fed Chair Powell and the NASDAQ Index to provide ADA direction through the afternoon session.

However, disappointing US economic indicators tested buyer appetite ahead of Powell’s press conference. Manufacturing PMI and ADP nonfarm employment change figures for January reflected the effect of Fed monetary policy on hiring and the economy.

Despite the bearish numbers, the Fed Chair delivered a market-friendly press conference. Powell acknowledged that the disinflationary process had started and hoped that rates would stay below 5%. Powell also expected to bring inflation to target without a significant downturn or sharp increase in the unemployment rate.

While the Fed delivered the bullish Wednesday session, sentiment toward the Cardano network and ADA utilization remain buoyant. This week, COTI launched the Djed algorithmic stablecoin, with investors waiting for EMURGO to launch the USDA stablecoin.

This morning, the Djed reserve ratio stood at 627% with base reserves of 27,912,820.9543 ADA, according to the Djed page, which sits within the 400% to 800% collateral ratio commitment.

Today, network updates will continue to provide direction. However, US economic indicators and the NASDAQ Index will also influence. Following weak US stats from Wednesday, a jump in initial jobless claims and a slide in core durable goods and factory orders would test buyer appetite.

ADA Price Action

This morning, ADA was up 1.51% to $0.401. A bullish start to the day saw ADA rise from an early low of $0.397 to a high of $0.410. The First Major Resistance Level (R1) at $0.409 capped the upside.

ADA is on the move.
ADAUSD 020223 Daily Chart

Technical Indicators

ADA needs to avoid a fall through the $0.390 pivot to retarget the First Major Resistance Level (R1) at $0.409 and the morning high of $0.410. Avoiding sub-$0.400 would support a bullish session. However, Cardano 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 $0.420. The Third Major Resistance Level (R3) sits at $0.450.

A fall through the pivot ($0.390) would bring the First Major Support Level (S1) at $0.379 into play. Barring a broad-based crypto sell-off, ADA should avoid sub-$0.370 and the Second Major Support Level (S2) at $0.360. The Third Major Support Level (S3) sits at $0.330.

ADA resistance levels are in play above the pivot.
ADAUSD 020223 Hourly Chart

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

ADA sat above the 50-day EMA, currently at $0.382. The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above the 50-day EMA ($0.382) would support a breakout from R1 ($0.409) to target R2 ($0.420). However, a fall through the 50-day EMA ($0.382) and S1 ($0.379) would give the bears a run at the 100-day EMA ($0.368) and S2 ($0.360). A fall through the 50-day EMA would send a bearish signal.

EMAs are bullish.
ADAUSD 020223 4 Hourly Chart

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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