Cardano price is struggling to maintain its foothold in the wake of increased market resistance and macroeconomic concerns. At the time of writing, ADA was trading 5.70% lower at $0.2704. The altcoin has been among the laggards in the cryptocurrency market this month, sinking more than 29% during the period. ADA’s total market cap has slipped by 4.80% over the last day to $9 billion, while the total volume of the token traded increased by 29%.
Higher Interest Rates
Cardano price has been under intense pressure for the past few weeks, following a turbulent period characterized by a crypto crackdown by the US Securities and Exchange Commission and broader market volatility. The cryptocurrency market was also in the red on Wednesday as investors chewed on comments by global central banks’ leaders. The global crypto market cap has dipped by nearly 2% over the last day to $1.17 trillion, with the total crypto market volume decreasing by 11.40% over the same period.
Bank of England (BoE) Governor, Andrew Bailey, said on Wednesday that the central bank was justified in its decision to hike interest rates by a surprise 50-basis points last week. The bank’s move was ahead of market expectations of a 25-basis point hike, reigniting debate among critics. Bailey said he accepted the criticism and insisted that the bank’s main objective was to lower core inflation which had proven to be persistent.
Additionally, Federal Reserve Chairman, Jerome Powell, said that he expects more multiple interest rate hikes in the future and possibly at an aggressive pace. According to Powell, the strong labor market has continued to drive inflation rates higher. During the Fed’s June policy meeting, policymakers signaled their support for further hikes in the future. The Fed has been hiking at each of its meetings since March 2022, before taking a break in June.
Most economists believe that rate increases will ultimately pull the US into at least a shallow recession. In a statement, Powell said, “There’s a significant possibility that there will be a downturn, the most likely case, but it’s certainly possible.” An environment of higher interest rates will be bearish for risk assets, including cryptocurrencies.
Cardano Price Technical Analysis
Cardano price has been struggling to recover from June’s lows as it grapples with stiff market resistance. Market participants have been scrutinizing ADA’s recent price action, hoping for a bullish breakout that could potentially reverse the asset’s performance.
On the daily chart, the ADA price has failed to surpass the 50-day and 200-day exponential moving averages, leading to a renewed downward trajectory. Its Relative Strength Index (RSI) has inched lower and is close to the oversold region.
As such, failure to move above the 50-day EMA will see the Cardano price fall further in the ensuing sessions as sellers target the next support level at $0.2420. However, a move past the critical level of $0.300 might give bulls enough momentum to push the price higher.
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