ADA Price Prediction: FTX Contagion Risk Leaves Sub-$0.300 in Play
Key Insights:
- On Wednesday, cardano (ADA) fell by 1.48%, marking the sixth loss from nine sessions.
- FTX contagion risk returned mid-week, with more platforms freezing withdrawals.
- The technical indicators remained bearish, with ADA sitting below the 50-day EMA, leaving $0.300 in view.
On Wednesday, ADA fell by 1.48%. Reversing a 1.51% gain from Tuesday, ADA ended the day at $0.332. Notably, ADA wrapped up the day at sub-$0.400 for the eighth consecutive session while avoiding the November 9 low of $0.309.
Tracking the broader crypto market, ADA rose to a mid-morning high of $0.344. Coming up against the First Major Resistance Level (R1) at $0.344, ADA slid to a late afternoon low of $0.324. ADA briefly fell through the First Major Support Level (S1) at $0.329 before a partial recovery to wrap up the day at $0.332.
FTX Contagion Risks Sends ADA to a New 2022 Low
Input Output HK (IOHK) network updates continued to take a backseat mid-week. Investors have shown little interest in network developments, with the markets eying the fallout from the collapse of FTX.
However, ADA has performed poorly this week relative to the rest of the top ten cryptos. For the current week, only BNB has seen heavier losses, falling by 3.30% versus a 1.82% loss for ADA.
Pre-FTX collapse network updates had failed to impress, with the talk of an influx of projects at the turn of the year providing price support. The current mood of the market may be more interested in in progress.
Last weekend, Input Output HK (IOHK) released the Cardano Weekly Development statistics.
According to the latest report,
- 104 projects launched on Cardano, unchanged from the previous week.
- Projects building on Cardano totaled 1,139, up by nine from the previous week.
Before the Vasil hard fork, the number of projects launched on Cardano had stood at 98, with 1,100 projects building on the Cardano network. Crypto investors will likely continue to eye the weekly stats and jump in once there’s a material increase from current levels.
While ADA is struggling alongside the broader crypto market, an influx in project numbers would materially change the price outlook.
However, FTX fallout will likely remain the focal point today. Updates on the Binance recovery fund would ease the pain, though Binance CEO CZ stated that more details would only be available in a couple of weeks.
ADA Price Action
This morning, ADA was down 3.01% to $0.322. A choppy morning saw ADA rise to an early high of $0.334 before sliding to a new 2022 low of $0.299.
ADA fell through the First Major Support Level (S1) at $0.323 and briefly through the Second Major Support Level (S2) at $0.313.
Technical Indicators
ADA needs to move through S1 and the $0.333 pivot to target the First Major Resistance Level (R1) at $0.343 and the Wednesday high of $0.344. A move through R1 would signal a possible breakout. However, ADA would also need the support of the broader market for a sustained rally.
In case of an extended rally, the Second Major Resistance Level (R2) at $0.353 would come into play. The Third Major Resistance Level (R3) sits at $0.373.
Failure to move through S1 and the pivot would leave the Second Major Support Level (S2) at $0.313 in play. However, barring another extended sell-off, ADA should avoid sub-$0.300 and the morning low of $0.299.
The Third Major Support Level (S3) sits at $0.293.
This morning, the EMAs and the 4-hourly candlestick chart (below) sent a bearish signal.
ADA sat below the 50-day, currently at $0.345. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.
A move through R1 ($0.343) and the 50-day EMA ($0.345) would bring R2 ($0.353) into play. However, failure to move through the 50-day EMA would leave ADA under pressure and sub-$0.300 in view.
