ADA Price Prediction: Bulls Need a Return to $0.420 to Target $0.450

Key Insights:

• ADA rallied by 8.27% on Wednesday to end the day at $0.419.
• Easing regulatory risk, favorable US lawmaker chatter, and US economic indicators delivered a breakout session.
• The technical indicators are bullish, bringing $0.450 into play.

ADA rallied by 8.27% on Wednesday. Following a 7.80% gain on Tuesday, ADA ended the day at $0.419. ADA revisited $0.420 for the first time since November 6.

A mixed start to the day saw ADA fall to an early morning low of $0.382. Steering clear of the First Major Support Level (S1) at $0.364, ADA rallied to a final-hour high of $0.420. ADA broke through the First Major Resistance Level (R1) at $0.402 and the Second Major Resistance Level (R2) at $0.416 to end the day at $0.419.

Input Output HK Silence Leaves ADA in the Hands of US Lawmakers

On Wednesday, there were no updates from Input Output (HK) (IOHK) to provide direction. The lack of IOHK updates following Tuesday’s Valentine upgrade left ADA in the hands of the broader crypto market.

Following the SEC moves against Kraken and Binance USD (BUSD), the SEC delivered a different message to the crypto market on Wednesday.

The SEC proposed amendments to their custody rules to incorporate cryptocurrencies on Wednesday. In addition to custody rules, the changes would also include amendments relating to reporting obligations, bookkeeping, and the registration of investment advisers.

Activity on Capitol Hill also drew attention, with lawmakers reintroducing a bill to facilitate crypto investments in retirement accounts. Former speaker of the House of Representatives Nancy Pelosi tweeted,

“Sen. Tuberfille (R) plans to reintroduce the “Financial Freedoms Act.”

Adding,

“It aims to stop the Dep of Labor from restricting individuals from investing their 401ks into crypto. Every American should have the right to invest their retirement money how they see fit.”

The shift in tone followed US lawmaker scrutiny of the SEC on Tuesday. The Senate Banking Committee held a hearing, Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets. Questions over Gary Gensler and the SEC’s regulation by enforcement and lack of SEC guidance to crypto firms highlighted Gensler and the SEC’s failings.

Whether the SEC will look to introduce regulations or return to regulation by enforcement remains to be seen. However, the increased US lawmaker scrutiny over the SEC’s actions is a positive for the crypto market.

The Day Ahead

IOHK network updates will continue to influence. However, SEC activity and lawmaker chatter from Capitol Hill will need consideration.

In the afternoon session, US jobless claims and wholesale inflation figures for January and the NASDAQ Composite Index could also provide direction. Following the US CPI Report, a jump wholesale inflation could refuel Fed fear.

ADA Price Action

This morning, ADA was down 2.39% to $0.409. A mixed start to the day saw ADA rise to an early high of $0.421 before falling to a low of $0.409.

Technical Indicators

ADA needs to avoid a fall through the $0.407 pivot to target the First Major Resistance Level (R1) at $0.432. A move through the morning high of $0.421 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 $0.445 and resistance at $0.450. The Third Major Resistance Level (R3) sits at $0.483.

A fall through the pivot ($0.378) would bring the First Major Support Level (S1) at $0.394 into play. Barring an extended broad-based crypto sell-off, ADA should avoid sub-$0.390 and the Second Major Support Level (S2) at $0.369. The Third Major Support Level (S3) sits at $0.331.

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

ADA sat above the 50-day EMA, currently at $0.380. Following the Wednesday bullish cross, 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 S1 ($0.394) and the 50-day EMA ($0.380) would support a breakout from R1 ($0.432) to target R2 ($0.445) and $0.450. However, a fall through S1 ($0.394) and the 50-day ($0.380) and 100-day ($0.378) EMAs would give the bears a run at S2 ($0.369) and the 200-day EMA ($0.366). A fall through the 50-day EMA would send a bearish signal.