Bears target $0.250 amid liquidity turmoil

the main ideas:

  • And ADA fell 12.33% on Friday. A bearish session saw ADA drop to a fresh 2022 low at $0.255 before stabilizing.
  • Cryptocurrency exchange liquidity concerns, recession, fear and IOHK updates weighed on investor sentiment.
  • Technical indicators remain bearish, which indicates a possible return below $0.250.

And on Friday, ADA was down 12.33%. After losing 2.60% on Thursday, ADA ended the day at $0.263. Notably, ADA fell to a fresh 2022 low at $0.255 before finding support.

A range-bound start to the day saw ADA climb to an early high of $0.301. However, when ADA failed to reach the first major resistance level (R1) at $0.307, ADA fell to a late low of $0.255. The extended selling saw ADA drop through key support levels today to end the day below $0.265 for the first time since January 2021.

IOHK’s weekly update fails to distract investors

On Friday, Input Output HK (IOHK) published its weekly development report. The report came amid a widespread sell-off in cryptocurrencies, which boosted the bearish sentiment.

to me On the Weekly Development Report for December 16,

  • 111 projects were launched on the Cardano Network, up three from the previous week.
  • The Cardano network-based projects totaled 1,151, unchanged from the previous week.
  • Plautus texts totaled 4,855, of which 402 were Plautus V2 texts. Plautus Texts increased by 508 from the previous week.

Before Vasil’s hard fork, the number of projects launched on Cardano was 98, with 1,100 projects built on the Cardano network.

Other stats included 56.8 million transactions (PW: 56.3 million), 7.28 million native tokens (PW: 7.20 million) and 66,902 token policies (PW: 66,530).

The latest numbers were disappointing for investors looking for a rebound in projects. However, markets are still expecting an influx in the new year. ADA is likely to remain under pressure if project flows remain weak.

The main network highlights also failed to mitigate the decline. Highlights include,

  • Spets is available for public testing in pre-production.
  • Added Marlowe runtime scalability testing and new endpoints.
  • Ongoing development of Hydra and Mithril proof of concepts.

With the latest update showing a modest increase in projects, ADA has succumbed to the forces of the broader crypto market. Currency liquidity moves and recession fears pushed the ADA to a new 2022 low before stabilizing.

ADA price action

This morning, ADA is down 0.38%, at $0.262. A mixed start to the day saw ADA climb to an early high of $0.267 before falling to a low of $0.259.

ADAUSD 171222 daily chart

Technical indicators

ADA needs to break the $0.273 pivot to target the first major resistance level (R1) at $0.291 and Friday’s high at $0.301. A return to $0.290 indicates a bullish session. But the ADA will need the broader market to support the afternoon session.

In case the rally continues, the bulls are likely to make a run at $0.310 but drop below the second major resistance level (R2) at $0.319. The third major resistance level (R3) is located at $0.365.

If it fails to move through the pivot, the first major support level (S1) leaves $0.245 in play. Barring another risk-driven sell-off, ADA should avoid below $0.240 and the second major support level (S2) at $0.227. The third major support level (S3) is located at $0.181.

ADAUSD 171222 hourly chart

This morning, both the Exponential Moving Averages and the 4-hour candlestick chart (below) sent a bearish signal.

The ADA was below the 50-day moving average, currently at $0.301. The 50-day EMA is retracing the 100-day EMA, with the 100-day EMA retracing the 200-day EMA, giving bearish signals.

A move through R1 ($0.291) will be supported by the 50-day ($0.301) and 100-day ($0.308) exponential moving averages running to fetch $0.310. However, failure to breach the 50-day moving average ($0.301) would put ADA under pressure. The 200-day moving average is at $0.321.

ADAUSD 171222 4-hour chart

Bears target $0.250 in liquidity turmoil – Coinphony [SV]

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