ADA Price Prediction: Risk Aversion Gives Bears a Look at sub-$0.40

Bob Mason
Published: Sep 19, 2022, 08:21 UTC

ADA succumbed to risk aversion, with Fed fear resurfacing. The Fed delivers its policy decision on the day before the Vasil hard fork.

ADA Tech Analysis - FX Empire

Key Insights:

  • On Sunday, cardano (ADA) tumbled by 7.82% to end the day at $0.448.
  • Investor sentiment towards the Vasil hard fork took a breather, with Fed fear sending the crypto market deep into negative territory.
  • Technical indicators are bearish, with ADA sitting below the 50-day EMA, signaling a return to sub-$0.40.

On Sunday, ADA tumbled by 7.82%. Reversing a 2.32% gain from Saturday, ADA ended the week down 12.2% to $0.448. It was the second more than 7% slump of the week, the first coming off the back of the US CPI report.

A mixed start to the day saw ADA rise to a mid-morning high of $0.490. Coming up short of the First Major Resistance Level (R1) at $0.492, ADA slid to a late low of $0.441. ADA fell through the day’s Major Support Levels to end the session below the Third Major Support Level (S3) at $0.450.

Following the bearish market reaction to Thursday’s Ethereum (ETH) Merge, investor focus returned to the Fed.

On Wednesday, the Fed will deliver its heavily anticipated rate hike. While the market has baked in a 75-basis point hike, there is plenty of uncertainty over the November move. Tuesday’s CPI report pointed to a hawkish 75-basis point hike.

While market angst toward the Fed will likely linger, Vasil hard fork updates will also draw attention.

Input Output HK Hard Fork Updates Remain ADA Positive

Overnight, Input Output HK shared the latest progress towards the Vasil hard fork. In the first of a series of tweets, the IOHK team announced,

“Vasil Update: This weekend, a joint CardanoStiftung & IOB team successfully submitted an update proposal to the chain, setting the Vasil upgrade in motion for 22nd September.”

Input Output HK went on to say,

“The new capabilities (including node and CLI support for reference inputs, inline datums, reference scripts, and collateral outputs), along with a new Plutus cost model, will become available for developers to utilize on mainnet exactly one epoch later, on September 27th.

Input Output HK wrapped things up by sharing a ‘what to expect blog’ and saying,

“Together, these new enhancements will bring increased functionality, performance, & scalability to Cardano.”

However, there are no updates on the progress of exchanges and dApps and their readiness for Thursday’s hard fork until later today.

As of Friday, updates on the ADA Hard Fork Mass Indicators are as follows:

  • Twenty-five exchanges are hard fork ready.
  • Twenty-one exchanges are in progress, with Coinbase and Kraken still reporting upgrades in progress.
  • Twenty-three have yet to start the upgrade process.

From the top 12 exchanges by liquidity:

  • Seven exchanges are hard fork ready: AAX, Binance, Bittrue, BKEX, MEXC, Upbit, and WhiteBit, with four in progress, including ChangellyPro, Coinbase, HitBTC, and
  • However, one exchange has yet to start the upgrade process:

Investors will be looking for Coinbase and Kraken to complete the upgrade process to deliver ADA price support.

Following the successful upgrade of 75% of SPO nodes to v1.35.3, the crypto market is tracking two critical mass indicators, these being,

  • Approximately 25 exchanges must upgrade (representing c.80% of ADA liquidity). Currently, IOHK reports exchanges upgrades accounting for 55% of ADA liquidity.
  • Top 10 Dapps by TVL confirm they’ve upgraded to 1.35.3 on Pre-Production & are ready for mainnet.

The next update will be available on Monday at 1600 UTC.

ADA Price Action

This morning, ADA was down 2.68% to $0.436. A mixed start to the day saw ADA rise to an early high of $0.451 before sliding to a low of $0.434.

ADA under pressure.
ADAUSD 190922 Daily Chart

Technical Indicators

ADA needs to move through the $0.460 pivot to target the First Major Resistance Level (R1) at $0.478. Input Output HK Vasil hard fork updates will continue to influence as the September 22 hard fork date approaches.

Having had no daily updates since Friday, investors will be looking for exchanges including Kraken and Coinbase to have completed the upgrade process.

In the case of an extended crypto rally, ADA could test resistance at $0.500 and the Second Major Resistance Level (R2) at $0.509. The Third Major Resistance Level (R3) sits at $0.558.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.429 in play. Barring another extended sell-off, ADA should avoid sub-$0.42 and the Second Major Support Level (S2) at $0.411. The Third Major Support Level (S3) sits at $0.362.

ADA support levels in play below the pivot.
ADAUSD 190922 Hourly Chart

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

ADA sat below the 50-day, currently at $0.476. The 100-day EMA fell back from the 200-day EMA, with the 50-day EMA easing back from the 100-day EMAs, delivering bearish signals.

An ADA move through the 50-day EMA ($0.476) and R1 ($0.478) would support a breakout from the 100-day EMA ($0.479) and the 200-day EMA ($0.482) to target $0.50. However, failure to move through the 50-day EMA would leave the support levels in play.

EMAs bearish.
ADAUSD 190922 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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