Cardano price remained under intense pressure as investors focused on the upcoming Federal Reserve interest rate decision. ADA was trading at $0.4528, which was slightly above this week’s low of $0.4336. It has fallen by more than 90% from the highest level in 2021, giving it a market cap of more than $15 billion.
However, people are still interested in Cardano. For instance, according to Cardano adoption statistics, 90% of the trading activity for ADA consisted of investors trading.
Federal Reserve interest rate decision
Cardano and other cryptocurrencies have been under pressure in the past few weeks as concerns about the Federal Reserve remain,
The Fed has maintained an increasingly hawkish tone in the past few months as inflation remains stubbornly high. Precisely, the bank has hiked rates by 225 basis points this year.
The Fed will conclude its two-day meeting on Wednesday. Analysts expect that the Fed will hike interest rates by 0.75%. The dot plot will also hint that it will deliver two more rate hikes this year.
Historically, cryptocurrencies like Cardano, Bitcoin, and Evmos tend to underperform in a period of high-interest rates. Indeed, this explains why all cryptocurrencies have crashed this year.
It also explains why American stocks have crashed. The Dow Jones, S&P 500, and Nasdaq 100 indices have dropped by more than 15% this year. At the same time, the VIX index has risen slightly while the fear and greed index has pulled back. Bond yields have also been rising.
Cardano price has also been in a strong bearish trend amid challenges in its ecosystem. According to DeFi Llama, the total value locked (TVL) in its ecosystem has dropped from more than $320 million to just $80 million. The three biggest DeFi apps in its ecosystem are Minswap, WingRiders, and SundaeSwap.
Analysts also believe that the upcoming Vasil hard fork will not be a bullish catalyst for Cardano. Besides, Ethereum price has crashed after the recent merge event.
Cardano price prediction
The four-hour chart shows that ADA price has been in a bearish trend in the past few days. It managed to move and retest the lower side of the ascending channel shown in blue. A break and retest is usually a bearish sign. It has also moved below the 25-day and 50-day moving averages while the MACD remains below the neutral point.
It has also formed a head and shoulders (H&S) pattern. Therefore, there is a likelihood that Cardano price will likely continue falling as sellers target the next key support at $0.40.