Cardano (ADA) has advanced more than 35% since March 10, 2023, rising from $0.297 to a high of $0.423. The current price of Cardano (ADA) stands at $0.416, and for now, bulls continue to control the price movement.
But where is the price of ADA going next, and what can we expect from the second quarter of 2023?
Today, Crypto Lists will discuss Cardano (ADA) price estimates from a technical and fundamental analysis perspective. Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk, and how much margin you have if trading with leverage.
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- 1 Enabling secure and scalable applications
- 2 Inflation remains far above the Fed’s target of 2%
- 3 Technical analysis for Cardano (ADA)
- 4 Important support & resistance levels for Cardano (ADA)
- 5 What speaks for the rise in the Cardano (ADA) price
- 6 What indicates the downfall of Cardano (ADA)
- 7 What do analysts and experts say
Enabling secure and scalable applications
Cardano is a blockchain platform that allows transactions in its native cryptocurrency ADA and enables developers to build secure and scalable applications powered by it. Cardano is connected with various payment programs, and it is important to say that a variety of projects have been built on the Cardano platform.
Cardano users need to buy ADA to facilitate transactions and participate in governance. Ownership of the token determines who gets to be a slot leader and add new blocks, and who earns a share of fees paid for transactions in blocks. ADA tokens are also used for voting on software policies, such as inflation rate, giving participants an incentive to hold ADA and ensure its future value.
The last several weeks have been very successful for Cardano (ADA), and the price of this crypto has added more than 35% to its value since March 10. According to on-chain data compiled by Santiment, a price-savvy cohort of whales began to accumulate ADA a few days after Cardano launched the native DJED stablecoin.
Between February 2 and April 11, whales that hold balances of 1 million to 10 million ADA accumulated 210 million coins worth approximately $84 million. When whales accumulate a cryptocurrency, it implies growing confidence among large institutional investors.
This increased demand puts upward pressure on the price and could inspire other retail investors to become bullish. Despite this, investors should continue to take a defensive investment approach as the macroeconomic landscape remains uncertain.
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Inflation remains far above the Fed’s target of 2%
The Bureau of Labor Statistics reported this Wednesday that the Consumer price index (CPI) increased in March at a slower-than-expected pace. The report showed the prices urban consumers pay for a basket of goods and services rose by 0.1% from February and 5.0% year-on-year, landing below consensus expectations of 0.2% and 5.2%.
However, the core measure that strips out volatile food and energy prices posted a monthly gain of 0.4% and 5.6% on an annual basis which indicates that the Fed is likely to raise interest rates by 25 basis points in May.
The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since 2006, but inflation remains far above the Fed’s target of 2%. Historically, higher rates lead companies to pull back on spending (and especially on hiring), and analysts are worried that an aggressive Federal Reserve will push the economy into a recession that could dent corporate earnings and stock markets.
The recent failures of Silicon Valley Bank and Signature Bank sparked turmoil in the banking sector, and members of the Federal Reserve’s monetary policy-setting committee said that the economy could enter a “mild recession.” The Federal Open Market Committee members said the U.S. banking system “remained sound and resilient, but investors should keep in mind that if negative effects on macroeconomic conditions were to deteriorate more than assumed, the risks would be skewed to the downside for economy and stock markets, particularly because historical recessions related to financial market problems tend to be more severe and persistent than average recessions.
Wells Fargo analysts said that the U.S. stock market found its footing after the recent banking sector turmoil, but they added that things would likely take a turn for the worse over the next few months as the economy bears the brunt of aggressive rate hikes.
“We believe further pain is in store for equities as the Fed’s monetary tightening as well as a credit crunch triggered by liquidity issues at banks take a toll on economic growth. This also represents significant risk to company earnings, with margins likely come under pressure and over the next 3-6 months, we expect to see a 10% correction, with the SPX trading down to 3700.”
– Wells Fargo analyst
Analysts now expect aggregate first-quarter S&P 500 earnings to be down 5.2% year-on-year, with earnings expected to slide even more in the upcoming quarters of 2023. The U.S. stock market could experience losses over the coming months, and investors should keep in mind that the crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere as well.
Technical analysis for Cardano (ADA)
Cardano (ADA) has advanced more than 35% since March 10, 2023, rising from $0.297 to a high of $0.423. The current price of Cardano (ADA) stands at $0.416, and as long the price of ADA is above $0.35, we can’t talk about a trend reversal, and the price of this crypto remains in the BUY-ZONE.
Important support & resistance levels for Cardano (ADA)
On this chart (the period from July 2022), I marked important support and resistance levels that can help traders to understand where the price could move. According to technical analysis, bulls control the price movement of Cardano (ADA) for now, and if the price advances above $0.45, the next target could be resistance that stands at $0.50.
The important support level is $0.35, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $0.30. If the price drops below $0.30, which represents very strong support, the next target could be located around $0.25 or even below.
What speaks for the rise in the Cardano (ADA) price
The amount of ADA traded over the last several days saw a significant increase, and it is important to mention that according to on-chain data compiled by Santiment, whales accumulated 210 million coins worth approximately $84 million between February 2 and April 11.
This may imply confidence among other investors, which could put further upward pressure on the price. According to the technical picture, ADA still has room for the upside, and if the price advances above $0.45, the next target could be resistance that stands at $0.50.
Traders should also consider that the price of ADA is correlated with Bitcoin, and if the price of Bitcoin jumps above $33000, we can see this cryptocurrency at a higher price level than the current price.
What indicates the downfall of Cardano (ADA)
The last several weeks have been very successful for Cardano (ADA), but investors should continue to take a defensive investment approach in the second quarter of 2023. Economists have warned that a global recession could be on the horizon, and the price of Cardano could drop below the current levels.
The important support level for ADA stands at $0.35, and if the price falls below this level, the next target could be $0.30. The price of ADA is also correlated with the price of Bitcoin, and if the price of Bitcoin drops below the $28000 price level, that would certainly have a negative influence on the price of Cardano.
What do analysts and experts say
Cardano (ADA) is advancing this trading week, but investors should keep in mind that the macroeconomic landscape remains uncertain. Major central banks will continue with an aggressive stance to fight inflation by raising interest rates, and risk-on assets such as cryptocurrencies could suffer again in such conditions.
Analysts now expect aggregate first-quarter S&P 500 earnings to be down 5.2% year-on-year, with earnings expected to slide even more in the upcoming quarters of 2023.
Wells Fargo analysts said that over the next 3-6 months, they expect to see a 10% correction on the U.S. stock market, with the SPX trading down to 3700, and if this happens, it would certainly have a negative influence on the price of Cardano (ADA).
For now, bulls continue to control the price movement of Cardano (ADA), but the highly volatile nature of the cryptocurrencies may scare investors again to sell Cardano if a dip happens in the cryptocurrency market.
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