ADA, the cryptocurrency that powers Cardano’s smart-contract-enabled layer-1 blockchain protocol, is coming under selling pressure on Friday in tandem with broader cryptocurrency markets. ADA/USD was last changing hands in the $0.37s, down around 1.5% on the day, with crypto weighed by downside in US stocks and upside in the US dollar and yields in the wake of a hotter-than-expected US inflation report.
The PCE Price Index report for January was released earlier on Friday and 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%. The latest data has triggered fears that the Fed might have to raise interest rates higher for longer, hence the risk-off reaction in crypto and traditional asset classes.
ADA’s latest decline means it is now over 10% below earlier monthly highs in the $0.42s and is back under its 200-Day Moving Average at $0.3815. Cardano is now at a technical crossroads and today’s close will be key.
Where Next for Cardano (ADA)?
ADA is currently testing an uptrend that has been in play since the end of 2022. If it breaks below this trend line and its 50DMA just under $0.37, then a drop back to a recent double bottom in the $0.35 area seems likely. However, if the crypto bulls regain control and can push ADA to close Friday’s session back above the 200DMA, then a retest of recent highs in the $0.42 area would become more likely.
Can Cardano (ADA) Reach $3 This Year?
The Cardano ecosystem will almost certainly continue to grow in 2023, thanks to its large and dedicated community of supporters and developers who continue to launch useful new protocols on the blockchain, including most recently the overcollaterized algorithmic stablecoin Djed. Assuming that cryptocurrency markets continue their gradual recovery from last year’s highly oversold levels, ADA can certainly continue to appreciate.
However, with US inflation remaining sticky at elevated levels and the economy still humming along nicely, the outlook for a significant easing of financial conditions isn’t great. In other words, 2023 will probably see at least three more Fed rate hikes, and might not see any rate cuts before the end of the year. For crypto exuberance to really come surging back, a series of rate cuts is probably going to be needed.
In that sense, ADA hitting $3.0 (near 10x gains from current levels) this year seems unlikely. But bulls shouldn’t lose heart. Cardano stands an excellent chance of retaining its place as a dominant blockchain and as broader crypto adoption rises in the coming years and decades, a rally to $3.0 is highly likely at some point. But bulls will need to be patient.
ADA Alternatives to Consider
ADA’s short-term outlook is patchy. Traders looking for quick gains might want to consider other high-potential tokens, such as those being sold in pre-sale by promising up-and-coming crypto projects. We’ve reviewed some of the best candidates in this list of the top 15 cryptocurrencies for 2023, as analyzed by the Cryptonews Industry Talk team.
The list is updated weekly with new altcoins and ICO projects.
Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.
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