Cardano price has posted significant losses over the past few weeks in the wake of a decline in the cryptocurrency market sentiment and risk appetite. The asset has crashed by more than 5% in the past week and nearly 27% in the past three months. Even so, the cryptocurrency was trading higher on Wednesday, with its total market capitalization up by more than 5.62% for the day. The total volume of the ADA token traded over the last 24 hours increased by 17%.
The cryptocurrency market was in the green on Wednesday, breaking slightly higher from its bearish trajectory recorded in the past week. The overall crypto market cap has increased by 3% over the last day to $1.07 trillion, while the total crypto market volume jumped by 42.40%. Crypto bigwigs, Bitcoin and Ethereum were trading nearly 4% higher at $26,582 and $1,685, respectively. The Cardano price jumped by nearly 6% over the same period.
Even so, the Crypto Fear and Greed Index shows a decline in market sentiment in the sector, indicating that the bearish trend will likely continue in the short term. The Index reading on Wednesday was a Fear level of 34, pointing to a decline in global risk appetite and an increase in selling pressure.
The selloff in the cryptocurrency market has also been contributed by the possibility of further hikes by the US Federal Reserve. The central bank hiked its rates by a quarter percentage point in its July meeting, after a pause in June. Minutes published by the Federal Open Market Committee (FOMC) last week, suggested that another interest rate hike is possible in 2023.
“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” the meeting summary stated.
Even so, markets seem to believe that the Fed is less likely to raise rates than the central bank suggests itself. The CME FedWatch Tool shows that based on interest rate futures, there’s an 88.5% chance of another pause in rate hikes in September.
Cardano Price Prediction
The daily chart shows that the Cardano price has been on a steep decline for the past few weeks, failing to gather momentum to yield a rebound above the crucial level of $0.2785. The asset remains below the 50-day and 200-day exponential moving averages, as well as the 50-day and 100-day simple moving averages. Its Relative Strength Index has moved slightly above the signal line but remains below the neutral level, while the MACD indicator remains in the red.
As such, the Cardano price is likely to drop further in the short term as bears eye the next important support levels at $0.2520 and $0.2205. On the flip side, a move above the bullish support level at $0.2785 might pave the way for a bullish breakout to the 50-day EMA.