Cardano price is in a deep sell-off as the coin erases some of the gains it made last week. ADA is trading at $1.7270, which is 30% below the all-time high of $2.4650. Its market cap has dropped to more than $56 billion, making it the sixth-largest cryptocurrency in the world.
What happened: Cardano, like all other altcoins is struggling as part of the overall decline of most assets. Commodity prices have retreated while US futures like the Dow Jones and Nasdaq 100 index are all in the red.
Similarly, most cryptocurrencies like Bitcoin and Ethereum have all retreated. This is partly because of the sharp rebuke by Lawrence Summers to the Federal Reserve and signs that China is putting more pressure on financial companies dealing with cryptocurrencies.
In a statement yesterday, Larry Summers, the former Treasury Secretary warned that the Fed was engaged in a dangerous exuberance by letting inflation rise. Therefore, there is a possibility that the Fed will start to tighten. Later today, the Fed will publish minutes of the past meeting.
To make a good ADA price prediction, it is important to first look at what Bitcoin is doing. On the weekly chart, we see that the BTC has moved below the 38.2% Fibonacci retracement level. It has also moved below the psychological level of $40,000. Therefore, there is a possibility that the currency will keep falling. If this happens, it will likely drag other altcoins like Ethereum and Cardano lower too.
Similarly, the Cardano price has moved below the 23.6% Fibonacci retracement level on the daily chart. It is also approaching the 38.2% retracement. Therefore, as the sell-off continues, there is a likelihood that it will also drop by about 30% as bears target the 50% retracement at $1.2725. However, a move above the 23.6% retracement level at 1.900 will invalidate this trend.
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