The Cardano price is bouncing back after crashing during the weekend. ADA is trading at $1.3022, which is 28% above the weekend low of $1.020. Between Wednesday and Sunday, the currency had crashed by more than 34%. It is now valued at more than $41 billion and is the 7th-biggest digital currency in the world.
Cardano meltdown explained: In the first part of last week, the Cardano price rallied to the highest level on record. This performance was mostly because of three reasons. First, on Wednesday last week, Coinbase became a publicly-traded company. At its peak, it was valued at almost $100 billion. Therefore, Cardano and other cryptocurrencies rallied before this event. It then declined as investors sold the news.
Second, ADA rallied because of the US inflation numbers. While the data showed that inflation bounced back in March, analysts were optimistic that this was temporary. As such, the Fed will likely maintain its easy money policies for a few more years to help bring the unemployment rate to below 4%.
Finally, ADA price rallied because of the ongoing update of the Cardano network that will see it embrace smart contracts. This will help developers build decentralized applications like DeFi. So, what next for Cardano prices?
On the four-hour chart, we see that the ADA price is attempting to have a relief rally after it fell sharply last week. The Average True Range (ATR) has risen sharply, which is a sign that volatility has returned. The price is also along the standard pivot point and is slightly below the 25-day moving average.
Therefore, in my view, the outlook for the currency is neutral. The key levels to watch are the first resistance at $1.5545 and the first support at $1.0145.
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