Cardano, a major blockchain protocol based on the layer-1 network is one of the largest blockchain networks in the industry.
Although the blockchain has been operating without any interruption, it is facing a major problem in terms of volume.
The price analysis shows that the trading price of ADA, the native token on the Cardano blockchain has been facing a downtrend. The value of the asset started to take a hit from the selling pressure of the bears.
It was on Friday when the trading price of the asset recorded a downtrend and it was a similar trend recorded across the crypto-verse. Almost the entire industry faced a similar trend and their valuations have dropped significantly.
What Caused ADA to fall?
On that particular day, the trading price of ADA suffered a decline and its value fell to a low of $0.37. As per the analysis data, the value of the asset slid by 1.5% in less than 24-hours.
Just as the small and novice investors were worried about what had caused the dip, the experts knew exactly what was going on.
The value of most of the cryptocurrency industry moved to the downside as the US inflation data shared by the Feds was hotter than the expectations of the economists.
With the inflation data coming in hot, the dollar value moved higher as the Feds stuck with their current monetary policy. The US stock prices also faced a downward trend, which pulled along the crypto industry.
Prior to the demise of ADA and the rest of the crypto market, the PCE Price Index report had been released by the Feds for January.
The MoM report for the core inflation showed that it had surged at a higher rate compared to the month of December.
Back in the month of December, the core inflation rates had surged by 0.4% and in January, the inflation rates rose to 0.6%. As for the Feds’ expectations, the inflation forecast for January was set to 0.3%.
The data that the Feds released gave a good idea of what they might have in mind in terms of interest rate hikes. This is going to result in a surge in the trading price of the dollar so the crypto mark would eventually move lower.
Cardano’s Current Price Movement and what is next?
Following the latest decline, the overall decline that ADA has recorded has increased by over 10% for the month of January.
As the month began, the trading value of ADA was somewhere around the high level of $0.42. It was expected to move upward in the upcoming days but the bearish sentiments have gotten the best of it.
As of now, the trading price of ADA is below the $0.3815 mark, which is the 200-day MA for the respective asset. Given the recent activities, the asset is now hovering around the technical crossroads.
Despite the recent declines, the bulls have not lost their confidence and sentiments. They may try again to push the trading price of ADA to a higher level.
At the beginning of 2023, the trading price of ADA had moved in the bullish zone and it was an uptrend that the asset had witnessed.
Now is the time when the uptrend trend for the asset will be tested and the bulls will need to increase their buying power to pass the test.
If the trading price of ADA takes another fall and it lowers below the $0.37 level, it could be very alarming for the asset. The trend may continue and the value of ADA may continue getting pulled in the lower direction.
The next lower level that ADA may hit would be $0.35 per ADA, which is not going to be a good sign for the bulls.
On the other hand, if the bulls succeed in the retesting, then the trading price of ADA may continue getting pushed higher. In the near future, ADA may retake $0.38 and then hit $0.42.