The price of Cardano (ADA) has been experiencing a downturn, with a decline of over 3% on June 19. This drop comes after the cryptocurrency saw a decrease of more than 30% in the past two weeks. As a result, many investors are now wondering if ADA’s price will continue to decline and mark its fourth consecutive red weekly candle.
The decrease in ADA’s price can be attributed to multiple factors. Firstly, Cardano has been mentioned in the list of crypto assets that the U.S. Securities and Exchange Commission (SEC) considers “unregistered securities.” This has raised concerns among traders, leading them to re-evaluate their positions in ADA.
Additionally, the recent hawkish guidance from the Federal Reserve has negatively impacted ADA’s price. With the expectation of another 50 basis points hike in 2023, higher interest rates may decrease investors’ appetite for risk assets like Cardano. This has further contributed to the downward pressure on ADA’s price.
Furthermore, open interest in ADA-linked derivatives has dropped to its lowest level since January 2021, reaching around $111 million. This suggests that traders are losing interest in ADA and reducing their exposure to the cryptocurrency. The past 24 hours have also witnessed liquidations worth approximately $360,000, with long positions being the most affected. These liquidations indicate that more bullish traders are closing their positions by selling ADA, adding to the selling pressure on June 19.
Related Post
Another factor that may impact ADA’s price in the coming days is its correlation with the U.S. Dollar Index (DXY). Historically, ADA’s price has shown an inverse correlation with the value of the U.S. dollar. However, the recent rise in the DXY may break this correlation, potentially leading to further declines in ADA’s price if the dollar continues to strengthen throughout June.
Despite the recent downturn, there are still potential bullish scenarios for ADA. Two weeks ago, Cardano traders demonstrated resilience to the SEC crackdown, as indicated by a bullish rejection candlestick on June 5. Since then, ADA’s price has risen by more than 15%. However, the daily relative strength index (RSI) for ADA is still below 30, indicating that the cryptocurrency is still in oversold territory. These technical indicators suggest the possibility of an extended consolidation or recovery period for ADA.
Moreover, a descending triangle pattern may come into play if the bullish scenario for ADA materializes. This pattern could lead to an upward move, with a target price of $0.30 in the next few weeks, representing a 16.5% increase from the current price levels. Conversely, if the descending triangle breaks down, ADA’s price could decline by 12% towards $0.226, which could serve as a significant area of support for the cryptocurrency.
It is important to note that this article does not provide investment advice or recommendations. Investing in cryptocurrencies involves risks, and readers should conduct their own research and analysis before making any investment decisions.
