- Cardano price has cooled down in the past few days.
- The fear and greed index is approaching its fear zone.
- MinSwap hype has faded in the past few weeks.
The Cardano price has gone nowhere in the past few days as investors reflect on the recent recovery and the rising risks in the market. ADA is trading at $1.151, which is slightly below the highest level this month.
Investors are getting fearful
Cardano price is falling as signs emerge that investors are getting fearful. The closely watched Bitcoin fear and greed index has moved to the neutral level of 48, which is below last week’s high of 56. While 48 is a neutral point, it is a sign that some investors are getting fearful about market risks.
One of the biggest risks in the market is the Federal Reserve. In a statement on Tuesday, Lael Brainard said what no other Fed official has said recently. While most of the bank’s officials warned that the bank will implement a 0.50% interest rate hike, none has said about the balance sheet.
Brainard said that the bank will likely start a period of quantitative tightening in a bid to lower its $9 trillion balance sheet. Therefore, the argument is that assets that did well during quantitative easing (QE) will underperform in a time of QT. This statement explains why Bitcoin, altcoins, and stocks retreated on Tuesday.
Another market risk is the inverted yield curve. Last week. The yield curve inverted to the lowest level since 2007. Historically, such market action has led to fears that the US will face a recession in the coming months. Still, a recession would not necessarily be bad for Cardano price because it would push the Fed to embrace more easing.
Meanwhile, the hype surrounding MinSwap has faded. In the past seven days, the total value locked in the platform has dropped by 19.5% to $154 million. SundaeSwap’s TVL has also fallen sharply by over 34% in the past seven days.
Cardano price prediction
So, should you buy Cardano? ADA price has been in a tight range recently. Fortunately, the stock is still slightly above the upper side of the descending channel shown in black. The stochastic oscillator has moved from the overbought level. Other oscillators like the Relative Strength Index (RSI) and MACD have also declined.
Therefore, despite the recent weakness, I think that the coin is still in a bullish trend. The likely scenario is where it does a break and retest pattern. Here, it will drop to the upper line of the channel and then resume the bullish trend.
Contributors
