ADA seems to be accumulating, but high volatility could define whether it will continue to the upside or the downside. The Fed could establish aggressive conditions for the markets, causing the estimated price of the cryptocurrency to be around USD 0.35.
ADA, the cryptocurrency of the Cardano blockchain, has long been part of the market cap top 10. The wide publicity of the token has generated a wave of enthusiasts for proof-of-stake technology.
Since September, the cryptocurrency has lost about 75% of its value, while the other global markets have crashed. The aggressive policies of Jerome Powell, the chairman of the US Federal Reserve (Fed), have caused fear.
Following that correction, ADA swept away the accumulation zones of the enthusiasts entering for fear of missing out (FOMO). Being in a dangerous zone, the breakeven of the Cardano liquidity pool (LP) could beat bearish players for the sake of investors.
It seems to be in an accumulation stage, re-entering the previously broken area. It could define whether it will continue to the upside or the downside through high-volatility movements.
The Relative Strength Index (RSI) is in a bullish area (74.95%), unfavorable for the price. However, its trend structure will resonate at those levels until falling into a regression.
Bitcoin (BTC) always influences the entire cryptocurrency market, so a rise in its value would confirm the forecast on ADA for the coming weeks. BTC is at the upper limit of the ascending channel that started earlier this year. The ascending triangle that its price has just broken would indicate a continuation to the upside.
Although BTC is a risky asset, higher stability by the Fed and peaceful negotiations in Ukraine would create the conditions for confirming that scenario.
A Bearish Scenario Is Possible in the Short Term
Nobody must rule out that those are projections based on the information that has been available so far. Therefore, new data could lead to modifying that bullish projection. With good risk management, the worst scenario in this market is that the opposite happens.
In May, the Fed will hold a new meeting, where they could establish aggressive conditions for the markets, invalidating the above analysis. Besides, pressure from the IMF could lead to canceling the BTC funds of El Salvador. Given that scenario, the estimated target for the price of ADA would be the USD 0.35 level.
Regardless of the scenario, they can invalidate the above information, as the market is always right. People are not only waiting for the events related to the war and the adoption of cryptocurrencies in Russia. Their eyes are also on the imminent launch of the Bitcoin-based bonds of El Salvador.
ADA is trading at around USD 1.18 and has accumulated a 20.05% gain over the last week. Its daily trading volume is above USD 1.50 billion, and its market capitalization is about USD 37.70 billion, according to CoinGecko.
Emulating the rest of the altcoin market, ADA fell by about 75% from the all-time high of USD 3.10 reached in September.
By Alexander Salazar
