Cardano price is one of the cryptocurrencies that have been worst hit by the months-long sell-off. In addition to the risk-off mood, easing of the hype as a major Ethereum killer has also contributed to the downtrend.
In recent months, cryptocurrencies have exuded a direct correlation with US stocks. In fact, the risk-off mood weighed on both of the riskier assets; yielding a decline of over 70% in Cardano price in a span of six months.
Interestingly, the correlation appears to be easing. Since the beginning of the week, the improved risk sentiment has boosted the US stock market as the rallying of the US dollar eases. For instance, earlier on Wednesday, Dow Jones hit a 4-week high at $30,829.03. The tech-heavy Nasdaq Composite index was up by 0.9% at $10,772.40 as at the time of writing.
However, the same cannot be said of cryptocurrencies. This follows the steep sell-off that has persisted since cryptos hit their peak in November 2021. Bitcoin, the leading crypto by means of market capitalization, has declined by over 15% over a span of one month. Similarly, Cardano price is trading close to the all-time low it hit a week ago at $0.3498.
In addition to the bearish crypto market, Cardano price is also under pressure from the its relatively low adoption rate compared to other cryptocurrencies. In the past year, it benefited from the hype that it would be one of the major Ethereum killers.
Notably, that hype has since eased; an aspect that explains the months-long decline. Besides, it has a small market share as Ethereum continues to enjoy a significant market share in industries such as metaverse and gaming.
Cardano price prediction
As seen on its four-hour chart, ADA/USD continues to trade below the 25 and 50-day EMAs. Besides, earlier on Wednesday, it dropped to the oversold zone with an RSI of 29. Based on these technical indicators, I view the subsequent bounceback as a corrective rebound. As such, it will likely record further losses in the subsequent sessions.
In particular, I expect Cardano price to remain below the previously steady support zone of 0.4000 in the short term. The range between 0.3500 and 0.3667 will be worth watching. Below the range’s lower border, the bears will have an opportunity to hit a fresh low of 0.3400.