ADA Price Prediction: Sub-$0.355 on IOHK Update and US Debt Crisis

Key Insights:

• ADA enjoyed a bullish Friday session, gaining 2.78% to end the session at $0.370.
• US economic indicators, the US debt ceiling crisis failed to overshadow the latest news from Input Output HK.
• However, the technical indicators remain bearish, bringing sub-$0.365 into view.

ADA rose by 2.78% on Friday. Reversing a 2.70% loss from Thursday, ADA ended the day at $0.370. Significantly, ADA fell short of the $0.380 handle for the fourth consecutive session.

After a choppy morning, ADA fell to an early evening low of $0.354. However, steering clear of the First Major Support Level (S1) at $0.349, ADA rose to a late afternoon high of $0.371. ADA broke through the First Major Resistance Level (R1) at $0.370 to end the day at $0.370.

The Debt Crisis and Consumer Sentiment Leave ADA Short of $0.380

US economic indicators and the ongoing US debt crisis sent ADA to a session low of $0.354 before support kicked in.

US consumer sentiment waned in May, with the Michigan Consumer Sentiment Index falling from 63.5 to 57.7, with the Expectations Index down from 60.5 to 53.4. Economists forecast more modest declines to 63.0 and 59.8, respectively. Consumer concerns about the economic outlook and the debt crisis weighed.

Input Output HK (IOHK) released the Weekly Development Report on Friday. There were no new incoming projects or new projects building on the Cardano network.

According to the May 12 report,

• 126 projects launched on the Cardano network, unchanged from May 5.
• Projects building on the Cardano network totaled 1,240, unchanged from the previous report.
• Plutus scripts totaled 7,962, of which 2,463 were Plutus V2 scripts. As of May 5, Plutus scripts stood at 7,872.

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.

Other stats included 66.3 million transactions (Previous Report: 65.8m), 8.24 million native tokens (PR: 8.21 million), and 73,114 token policies (PR: 72,348).

While there was no increase in new projects to support a breakout session, network updates and the upward trend in Plutus scripts and transactions were ADA-positive.

Network updates included,

• Cardano node v.8.0.0 released.
• New Lace version 1.1.0 released.
• Mithril 2318.0 distribution released.
• IOG, EMURGO, and the Cardano Foundation announced the successful applicants for CIP-1694 workshop grants.

The Day Ahead

Investors should monitor Input Output HK (IOHK) network updates. However, a lack of updates should leave ADA in the hands of the broader crypto market and US debt ceiling-related news.

SEC v Ripple case-related chatter and Binance and Coinbase (COIN) news will move the dial. However, investors should track US lawmakers and regulatory activity.

ADA Price Action

This morning, ADA was down 1.08% to $0.366. A bearish start to the day saw ADA fall from an opening price of $0.371 to a low of $0.366.

Technical Indicators

Resistance & Support Levels

ADA has to avoid the $0.365 pivot to target the First Major Resistance Level (R1) at $0.376. A move through the morning and the Friday high of $0.371 would support a bullish session. However, Cardano network updates and the broader crypto market would need to provide support.

In case of a breakout, ADA would likely test the Second Major Resistance Level (R2) at $0.382 and resistance at $0.385. The Third Major Resistance Level (R3) sits at $0.399.

A fall through the pivot would bring the First Major Support Level (S1) at $0.359 into play. However, barring an extended broad-based crypto sell-off, ADA should avoid sub-$0.345. The Second Major Support Level (S2) at $0.348 should limit the downside. The Third Major Support Level (S3) sits at $0.331.

Today, the EMAs and the 4-hourly candlestick chart (below) sent bearish signals.

ADA sat below the 50-day EMA, currently at $0.371. The 50-day EMA fell back from the 200-day EMA, with the 100-day EMA pulling back from the 200-day EMA, delivering bearish signals.

A move through the 50-day EMA ($0.371) would support a breakout from R1 ($0.376) to give the bulls a run at the 100-day EMA ($0.380) and R2 ($0.382). However, failure to move through the 50-day EMA ($0.371) would leave S1 ($0.359) in view. A move through the 50-day EMA would send a bullish signal.