Key Points Crypto prices have continued to pull back from recent highs on Monday with Bitcoin near $20,400 and Ethereum near $1,140.
Cardano has been under selling pressure over the past two days, with ADA breaking below a short-term support trendline.
But ADA continues to consolidate within a longer-term pennant as it awaits direction from macro/Vasil hardfork upgrade developments.
Market Update A downbeat tone to global macro trading conditions means that cryptocurrencies are for the most part starting the week on the back foot.Most major major cryptocurrencies are trading close to session lows and with fairly substantial losses versus last week’s highs.
Bitcoin and Ethereum , the largest two cryptocurrencies by market capitalization were last trading lower by about 2-2.5% each over the last 24 hours, according to CoinMarketCap.BTC/USD was last changing hands just under $20,400, whilst ETH is around $1,140 per token, 9.0% and nearly 11% lower versus last Friday’s highs each.
Analysts are citing a combination of factors as weighing on risk assets like stocks and crypto (the Nasdaq 100 index was last down about 1.8% on the day).US banks kick off the start of the US earnings later this week and investors are nervous that current earnings estimates might be overly optimistic.
Meanwhile, last week’s strong US jobs and service sector activity survey data, whilst easing near-term recession fears, is being cited as a negative for sentiment as it might encourage the Fed to continue tightening monetary policy in an overly aggressive way.
Upcoming US data releases later this week will decide whether the Fed raises interest rates by 50 or 75 bps later this month.June Consumer Price Inflation (CPI) data is out on Wednesday and June Retail Sales data is out on Friday.
Traders will recall an upside surprise in the May CPI data sent risk assets into a tailspin after forcing the Fed to up the pace of rate hikes to 75 bps from 50 bps per meeting.
Profit-taking ahead of macro risk events is thus also being cited as a factor weighing on risk assets like stocks and crypto on Monday.
Story continues Crypto in Consolidation This July At the same time, most major cryptocurrencies are still higher versus recent lows and in the green on the month.Bitcoin is about 2.5% higher on the month and Ethereum is up close to 7.0%.
Traders are clinging to hopes that data this month will reveal 1) that US price pressures have peaked and 2) the US economy is starting to cool off.
If upcoming data releases do indicate this, then the Fed’s tone on continued policy tightening into the end of the year and 2023 may soften a little at this month’s meeting.
Such developments might facilitate a medium-term relief rally in crypto that could put major coins on course for their first monthly gain in four.
Of course, if macro developments are negative (i.e.inflation still rising, US economy continuing to heat up) then there isn’t much to stop major cryptocurrencies from breaking out to fresh annual lows.
Cardano (ADA) Price Prediction It’s been a pretty ugly past two days for the native token of the Cardano blockchain ADA .The cryptocurrency has slipped over 6.5% since Saturday, with 3.5% of these losses coming on Monday alone.ADA/USD is now nearly 10% below last Friday’s highs just above $0.49 as it probes late-June lows under $0.45.
Indeed, the cryptocurrency on Monday hit its lowest level of the month so far by a small margin.
Technical selling accelerated on Monday after ADA broke below a short-term support trendline.
ADA/USD experiences short-term selling pressure after a bearish break.Source: FX Empire But ADA continues to trade within a pennant structure that has been squeezing the price action since mid-June.
Thus, it remains too early for the bears to declare victory.
Ahead of key upcoming macro risk events like this week’s US CPI data, a big breakout of this price action structure seems unlikely.
ADA/USD will likely take its cue from the broader crypto market reaction to upcoming events.
Technically speaking, with ADA current testing the lower bounds of the pennant structure, the cryptocurrency is looking at risk of a bearish breakout.
A convincing fall below the $0.44 area would open the door to a swift test of the June lows at $0.42 and, beyond that, a test of annual lows near $0.39.Should macro developments turn out favorably this week for crypto risk appetite, Cardano is in with a decent shot of rallying back to the upper portion of its pennant and threatening an upside break.
Any convincing push above around the $0.48 area would open the door to technical buying that could see the pair quickly test last Friday’s highs above $0.49.Beyond that, there is notable resistance at $0.5060 (the 50DMA), around $0.5250 (late-June highs) and in the $0.54 area (support turned resistance from early June).
ADA/USD still consolidating within a pennant structure.Source: FX Empire Upcoming Vasil Hardfork Another key risk event this month for Cardano that traders need to monitor is the cryptocurrency’s upcoming blockchain upgrade.The so-called Vasil hardfork upgrade was delayed in June, with Cardano developers Input-Output Hong Kong (IOHK) citing seven technical bugs that still needed ironing out.
None were categorized as “severe” and IOHK said its decision to delay was taken out of an “abundance of caution” to ensure its upgrade is delivered smoothly.
The Vasil upgrade is considered to be the most complex program of development and integration on Cardano since the Alonzo hard fork added smart contract functionality back in September 2021.
For a more in-depth take on the upcoming Cardano Upgrade, read here .
This article was originally posted on FX Empire
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