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Cardano (ADA) Could Soar 15 Percent Despite Concerns About “Macro Factors”

 


Cardano ( ADA ) is making a major network update called "Vasil " on September 22, potentially making the blockchain more scalable and cheaper. Still, this news hasn't resulted in a decisive surge in ADA.


Macro factors weigh on ADA upside

ADA's price is up about 3.5 percent to $0.51 since the Vasil announcement. There was also an increase of around 14 percent, which was almost completely lost again. In other words, traders initially bought into the hype surrounding Vasil, but quickly backed out, as illustrated by the price action below.

Cardano founder Charles Hoskinson attributed this to "macro factors" behind ADA's underperformance, despite Vasil's euphoria . He explained that the crypto markets, by and large, are "decoupled from reality." He further said:


"Cardano has never been stronger and frankly many other projects across the industry are solid as well, but that's not reflected either. All you see is a red sea."

Risky assets are currently preparing for another deep drop ahead of the Federal Open Market Committee (FOMC) meeting on September 20-21.


Markets believe the Federal Reserve will announce another 0.75 percent hike in interest rates on September 21. Overall, the US Federal Reserve is aiming to raise the interest rate to between 3.75 percent and 4 percent by the end of 2022.

The high interest rates could hurt Cardano and other large-cap crypto assets as it likely makes cash-based instruments more attractive among investors.

From a technical perspective, it looks like Cardano will see a mini-rally ahead of the Vasil hard fork.


On the four hour chart, ADA price is testing support where it could possibly rally. This consists of a multi-week ascending trendline and support bar highlighted in the chart below.


What if ADA recovers? The immediate upside target on ADA is then around $0.50. Two resistances meet at this level: a "multi-week descending trendline" and a "mid-target" that has acted as a price cap since mid-August.


A breakout of $0.50 could result in ADA testing $0.53. This level has historically proved to be a significant resistance. In other words, ADA could gain 15 percent compared to the September 7 price ahead of the Vasil hard fork.


In this context:  Cardano outperforms Bitcoin in the ranking of the world's largest brands


However, on the charts for the larger timeframes, ADA is looking weaker. Its three-day trajectory exhibits a bearish continuation pattern, namely a " descending triangle ".

ADA could drop to $0.26 if it breaks below the descending triangle trendline. This corresponds to a drop of almost 40 percent compared to the current price.

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