The Cardano price continues to struggle as investors worry about the Federal Reserve and the rising inflation in the United States. ADA is trading at $1.1440, which is a few points above this week’s low of $1.0736. It has crashed by over 63% from its highest level in September last year.
ADA sell-off explained
Cardano is a popular blockchain project that was started in 2016 by Charles Hoskinson. The goal was to create an Ethereum alternative that is faster, environmental-friendly, and cost-efficient.
Cardano’s roadmap involved several stages. The first one was known as Byron and was the foundation of the ecosystem. It was followed by the decentralization phase known as Basho and the smart contract era known as Goguen.
The Goguen era started in 2021 when the developers launched the Alonzo hard fork that introduced the concept of smart contracts to the network. This phase will be followed by Basho and Voltaire, which will be about scaling and governance.
There are several reasons why the Cardano price has crashed by over 63% from its all-time high. First, investors are worried about the lack of projects being built on the network. As you recall, the ADA price jumped to an all-time high before the Alonzo hard fork.
While Cardano’s developers have touted projects in the pipeline, the reality is that investors are concerned about whether they will catch up. Besides, the smart contract layer 1 and layer 2 industries are getting competitive with the likes of Solana, Avalanche, Oasis Network, and Kadena. Worse, most of these projects were launched years after Cardano.
Second, the Cardano price has declined because of the rising fears of interest rates. With the American inflation rising and the unemployment rate falling, there are concerns that the Federal Reserve will embrace a more hawkish tone this year. This also explains why the tech-heavy Nasdaq 100 index has crashed to the correction zone recently.
Cardano price prediction
The daily chart shows that the Cardano price has been in a strong bearish trend lately. Along the way, the coin has formed a death cross, which happens when the 200-day and 50-day exponential moving averages (EMA) make a crossover.
Other bearish patterns have happened. For example, it has moved below the key support at $1.1940, which was the lowest level in December. Oscillators like the Relative Strength Index (RSI) and MACD have also declined. Therefore, the path of the least resistance for the ADA price is in the downside.
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