Why is Cardano price up today?
2023.03.22 10:36
Cardano (ADA) rallied to its best price level in a month as cryptocurrency investors prepared for the Federal Reserve’s looming interest rate decision.
Fed boosts appetite for cryptocurrencies like ADA
On March 22, ADA’s price surged by as much as 4.58% to $0.388, its highest level since Feb. 24. This bucked the trend as the total crypto market capitalization underperformed the Cardano token, dropping 0.4% on the same day.
ADA/USD versus crypto market cap daily performance chart. Source: TradingView
All eyes are on the Fed meeting on March 22 as chairman Jerome Powell tries to balance his anti-inflation campaign with a flurry of sudden banking collapses.
The Federal Reserve’s intervention to safeguard regional banks with emergency lending measures and hopes that it would be less hawkish in the future has helped top-ranking crypto assets rally in March, including Cardano.
ADA’s price is up by a decent 4% month-to-date versus top coin Bitcoin’s (BTC) 20% gains in the same period.
Cardano network upgrade, whale activity
Cardano’s performance in the past seven days, including March 22, mirrors Bitcoin’s, with both rising by over 16%.
ADA’s upside momentum coincides with Cardano’s new network upgrade launch on March 17. Called dynamic peer-to-peer (P2P) networking, the new node version reportedly enables bidirectional usage of block-producing nodes and relay nodes, which may defend against failures or malicious behavior.
ADA s price has rallied 20% since Cardano’s dynamic P2P update. Source: TradingView
Interestingly, ADA price gains in March appear to have been supported by Cardano whales, according to on-chain data provided by Santiment.
For instance, the percentage of Cardano tokens held by addresses holding 100 million–1 billion ADA has risen from 6.16% on March 1 to 7.56% on March 22.
On the other hand, the ADA supply held by the 10 million–100 million holder cohort has dropped from 41.32% to 39.67% in the same period.
Cardano supply distribution among addresses holding 1,000 to 100 million ADA. Source: Santiment
This suggests that the 10 million–100 million ADA holders stepped up their buying in March and, as a result, entered the 100 million–1 billion cohort. Similarly, addresses holding anywhere between 1,000 to 10 million ADA tokens increased their supply in March.
What’s ahead for ADA price?
From a technical perspective, ADA price eyes a pullback as it moves near its multimonth descending trendline resistance, as shown in the daily chart below.
ADA/USD daily price chart. Source: TradingView
In that case, the short-term price target for ADA/USD appears near its ascending trendline support (currently around $0.34), which has been capping its downside attempts since December 2022.
Related: The impact of the Credit Suisse bank crisis on the crypto market
Conversely, a decisive close above the descending trendline resistance could have ADA test its support-turned-resistance area (purple) — the $0.41–0.44 range. This move could also confirm its inverse-head-and-shoulders pattern, as illustrated below.
ADA/USD daily price chart featuring inverse-head-and-shoulders pattern. Source: TradingView
An inverse-head-and-shoulders is a bullish reversal pattern, resolved when the price breaks above its neckline support level. As a rule of technical analysis, its upside target is measured after adding the distance between its lowest point and neckline level to the breakout point.
As a result, ADA’s price could rally by almost 100% to $0.741 by June if the pattern plays out.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
