• Cardano (ADA) is coming under selling pressure Friday in tandem with broader crypto markets.
• The latest US inflation report has triggered fears of more rate hikes, putting crypto gains at risk.
• ADA is currently testing an uptrend and a close above the 200DMA could signal retest of highs.
Cardano Price Forecast
Cardano (ADA) is coming under selling pressure on Friday as broader cryptocurrency markets are weighed down by downside in US stocks and upside in the US dollar and yields following a hotter-than-expected US inflation report. ADA/USD was last changing hands in the $0.37s, down around 1.5% on the day.
US Inflation Report
The PCE Price Index report for January was released earlier today, which revealed a larger-than-expected jump in MoM core inflation to 0.6% from 0.4% in December, which was also revised higher from the previous estimate of 0.3%. This data has triggered fears that the Federal Reserve might have to raise interest rates higher for longer, leading to a risk-off reaction across both traditional and cryptocurrency asset classes.
Technical Crossroads
Cardano’s recent decline has pushed it over 10% below earlier monthly highs in the $0.42s and below its 200-Day Moving Average at $0.3815, leaving it at a technical crossroads – today’s close will be key to determine future direction for ADA/USD prices.
Outlook for Cardano
The Cardano ecosystem is expected to continue growing this year thanks to its passionate community of developers launching useful new protocols on the blockchain, such as Djed’s overcollaterized algorithmic stablecoin recently launched on mainnet. However, with US inflation remaining sticky at elevated levels and further Fed rate hikes likely over 2023, exuberance may not return quickly enough for ADA/USD prices to reach $3 this year as some have predicted – though further appreciation certainly remains possible if conditions improve later this year or into 2024..
Conclusion
ADA is currently testing an uptrend that has been in play since late 2022; if broken then double bottom support near $0.35 could be tested while a close above 200DMA could signal retest of recent highs near $0 .42 area . With US inflation remaining sticky at elevated levels , significant easing of financial conditions isn’t likely before end of 2023 ; thus , ADA hitting $3 this year appears unlikely but further appreciation remains possible depending on macroeconomic environment later this year or into 2024 .