Sub-$0.42 in sight despite morning support

Key ideas:

  • ADA rose 0.20% on Friday to post a third straight day in the green.
  • Investors’ mixed reaction to the US retail sales numbers and chatter from FOMC members led to a choppy session on Friday.
  • Technical indicators are bearish with ADA trading below the 50-day EMA.

On Friday, ADA rose 0.20%. After a 0.64% gain from Thursday, ADA ended the day at $0.4419.

After a choppy morning session, ADA fell to a late low of $0.4326 before moving.

Well off the first major support level at $0.4232, ADA hit a daily high of $0.4539.

ADA broke through the first major resistance level at $0.4524 before falling back below $0.4450.

US retail sales and FOMC member discussions drove crypto market volatility throughout the US session.

While US retail sales numbers were better than expected, June economic indicators supported a major Fed rate hike later this month.

Fed chatter provided support late in Friday’s session, with investors showing relief from FOMC members favoring a 75 basis point rate hike. However, as the dust settles, the likelihood of a 100 basis point rate hike remains high, assuming the Fed plans to avoid an emergency meeting in August.

Cardano Vasil Hard Fork Eclipsed by Central Banks

The Cardano hard fork failed to trigger a breakout in ADA as investor anxiety over Fed monetary policy and fears of a recession weighed.

After expectations of an event in June, updates on the progress of the Vasil hard fork weighed on ADA.

At the end of June, IOHK provided the crypto market with an upgraded Vasil update. IOHK was planning a final hard fork week in July. News of the delay was detrimental, with ADA falling from $0.50 to a July low of $0.4026 before finding support.

Updates on the hard fork will continue to influence, although investor sentiment towards Fed monetary policy and the US economy will remain influential.

ADA Price Action

At the time of writing, ADA was down 0.16% at $0.4412.

A mixed start to the day saw ADA hit an early high of $0.4430 before falling to lows of $0.4317.

ADA tested the first major support level early on.

ADAUSD 160722 Daily Chart

Technical indicators

A move in ADA through the $0.4428 pivot would support a run to the first major resistance level (R1) at $0.4530 and Friday’s high of $0.4539.

ADA would need support from the broader market for a break from the morning high of $0.4430.

In the event of an extended crypto rally, ADA may test the second major resistance level (R2) at $0.4641 and resistance at $0.47.

The third major resistance level (R3) is located at $0.4854.

Failure to go through the pivot would bring the first major support level (S1) back into play at $0.4317.

In case of prolonged selling, ADA would likely test the second major support level (S2) at $0.4215 and the support at $0.4150.

The third major support level (S3) is located at $0.4002.

ADAUSD 160722 Hourly Chart

This morning, the EMAs and the 4-hour candlestick chart (below) are sending a bearish signal.

At the time of writing, ADA is trading below the 50-day EMA, currently at $0.4438. Today, the 50-day EMA retreated from the 100-day EMA. The 100-day EMA retreated from the 200-day EMA; negative price.

A further pullback from the 50-day EMA would support a slide through the first major support level to put less than $0.42 into play.

ADAUSD 160722 4 hour chart

Richard L. Militello