ADA Price Prediction: Bulls to Target a Pre-Fed $0.418 on Djed Launch

Bob Mason
Published: Feb 1, 2023, 05:42 UTC

Following a return to $0.400 on Tuesday, it could be a choppy day for ADA. Network updates are bullish while Fed Chair Powell could deliver a blow.

ADA Tech Analysis - FX Empire

Key Insights:

  • ADA rallied by 4.56% on Tuesday to end the day at $0.390.
  • Algorithmic stablecoin news, sentiment toward the Cardano network, and the NASDAQ Index provided support.
  • The technical indicators remain bullish, supporting a return to $0.450.

ADA rallied by 4.56%. Partially reversing a 6.28% tumble from Monday, ADA ended the month up by 58.54% to $0.390. ADA visited $0.400 for the first time since November 8.

A bearish start to the day saw ADA fall to a mid-morning low of $0.368. Steering clear of the First Major Support Level (S1) at $0.361, ADA rallied to a late afternoon high of $0.400. ADA broke through the First Major Resistance Level (R1) at $0.392 before easing back to end the day at $0.390.

US Stats and the Djed Stablecoin Launch Delivered Support

On Tuesday, Input Output HK (IOHK) shared the news of COTI launching the Djed algorithmic stablecoin. IOHK announced the launch on Twitter, saying,

“Congratulations to the team at COTI Network on the launch of DJED today and another great step forward in the continuing evolution of the Cardano DeFi ecosystem.”

This morning, the reserve ratio stood at 597%, according to the Djed page, which sits within the 400% to 800% collateral ratio commitment.

Investors now await the launch of EMURGO’s USDA stablecoin. On Tuesday, Cardano Spot shared the latest, saying,

“USDA will be a bridge between DeFi and RealFi, it brings external value to Cardano ecosystem compared to crypto-backed stables. Alpha: Anzens will bring real-world assets on Cardano like gold or other commodities. Whitepaper coming in weeks!”

While the network updates were positive, US economic indicators and the NASDAQ Index supported a return to $0.400.

Today, network updates will continue to provide direction. However, the Fed could test the appetite for riskier assets late in the session. With the markets betting on a 25-basis point interest rate hike, a hawkish Fed Chair Powell press conference could spook investors.

ADA Price Action

This morning, ADA was down 1.28% to $0.385. A mixed start to the day saw ADA rise to an early high of $0.392 before falling to a low of $0.385.

ADA sees red.
ADAUSD 010223 Daily Chart

Technical Indicators

ADA needs to move through the $0.386 pivot to target the First Major Resistance Level (R1) at $0.404. A move through the Monday high of $0.400 would signal a breakout session. However, Cardano updates and the Fed Chair Powell press conference would need to support a bullish session.

In the event of a breakout, ADA would likely test the Second Major Resistance Level (R2) at $0.418. The Third Major Resistance Level (R3) sits at $0.450.

Failure to move through the pivot ($0.386) would leave the First Major Support Level (S1) at $0.372 in play. Barring another broad-based crypto sell-off, ADA should avoid sub-$0.360 and the Second Major Support Level (S2) at $0.354. The Third Major Support Level (S3) sits at $0.322.

ADA support levels in play below the pivot.
ADAUSD 010223 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 $0.379. 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 ($0.379) would support a breakout from R1 ($0.404) to target R2 ($0.418). However, a fall through the 50-day EMA ($0.379) would bring S1 ($0.372) and the 100-day EMA ($0.365) into view. A fall through the 50-day EMA would send a bearish signal.

EMAs remain bullish.
ADAUSD 010223 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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