ADA Tech Analysis - FX Empire

ADA Eyes Fed-Fueled Return to Sub-$0.40 Despite Hard Fork Updates

Key Insights:

  • It was a bearish Tuesday session, with Cardano (ADA) tumbling by 7.23%.
  • Bearish sentiment overshadowed Vasil hard fork updates, with ADA falling back from $0.50.
  • Technical indicators are turning bearish, with ADA sitting below the 100-day EMA to bring sub-$0.40 into play.

On Tuesday, ADA slid by 7.23%. Following a 1.19% loss on Monday, ADA ended the day at $0.462.

A mixed morning saw ADA rise to a mid-morning high of $0.513 before hitting reverse. ADA broke through the First Major Resistance Level (R1) at $0.509 before sliding to a late low of $0.460. ADA fell through the First Major Support Level (S1) at $0.485 and the Second Major Support Level (S2) at $0.472 to end the day at sub-$0.470.

Bearish sentiment across the broader market likely forced investors to lock in profits following last week’s 17.3% rally. The sell-off came despite positive Vasil hard fork updates.

Going into the US session, crypto market sentiment deteriorated, with US economic indicators adding further price pressures.

Input Output HK Hard Fork Updates Remain ADA Price Positive

Overnight, Input Output HK shared the latest on the Vasil hard fork, with positive updates supporting the September 22 hard fork date.

As of September 6, updates on the ADA Hard Fork Mass Indicators are as follows:

  • 11 exchanges are hard fork ready, up from 9 as of September 5:
  • Exchanges that are hard fork ready include AscendEX (Bitmax), Bitmart, Bitrue, Btc Turk, Dex-Trade, Gate.io, Litebit.eu, MEXC, NDAX, OKex, and Whitebit.
  • 25 exchanges are in progress, with Binance ‘nearly there’ and Coinbase and Kraken reporting upgrades in progress.
  • From the top 12 exchanges by ADA liquidity, XT.com, AAX, and ChangellyPRO have yet to start the upgrade process, while Bitrue, MEXC, and Whitebit have upgraded.

Following the successful upgrade of 75% of SPO nodes to v1.35.3, the crypto market is tracking two critical mass indicators, these being,

  • Approximately 25 exchanges upgrade (representing c.80% of ADA liquidity).
  • Top 10 Dapps by TVL confirm they’ve upgraded to 1.35.3 on Pre-Production & are ready for mainnet.

Overnight, PoolTool showed that 83% of Cardano SPO nodes have upgraded to v1.35.3. While upgrade momentum has slowed, nodes achieved the 75% threshold last week.

SPO Node Upgrades.
Fork Upgrades 070922

ADA Price Action

This morning, ADA was down 1.52% to $0.455. A choppy start to the day saw ADA rise to an early high of $0.464 before falling to a low of $0.454.

ADA under pressure.
ADAUSD 070922 Daily Chart

Technical Indicators

ADA needs to move through the $0.478 pivot to target the First Major Resistance Level (R1) at $0.497. ADA needs to move through the $0.478 pivot to target the First Major Resistance Level (R1) at $0.497. While the Vasil hard fork remains positive, Binance and Coinbase need to upgrade to deliver ADA price support.

In the case of an extended crypto rally, ADA could test the Second Major Resistance Level (R2) at $0.531. Dovish FOMC member chatter would support a breakout from the Tuesday high of $0.513. The Third Major Resistance Level (R3) sits at $0.584.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.444 in play. However, barring another extended sell-off, ADA should avoid the Second Major Support Level (S2) at $0.425. Hawkish FOMC member chatter would bring sub-$0.43 into view. The Third Major Support Level (S3) sits at $0.372.

ADA support levels in play.
ADAUSD 070922 Hourly Chart

This morning, the EMAs and the 4-hourly candlestick chart (below) sent a bearish signal.

ADA sat below the 100-day EMA, currently at $0.474. The 50-day EMA converged on the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bullish signals.

A bearish cross of the 50-day EMA through the 100-day EMA would bring the Major Support Levels into play. However, a move through the EMAs would give the bulls a run at R1 ($0.497).

EMAs bearish.
ADAUSD 070922 4-Hourly Chart