- Cardano price went parabolic on Wednesday ahead of the Fed decision.
- The Federal Reserve is expected to hike interest rates by 0.25%.
Cardano price has been in a strong bullish momentum in the past few days as investors wait for the upcoming Federal Reserve decision. ADA jumped to a high of $0.3875, the highest level since February 27. It has jumped by ~25% from the lowest point this year.
Bitcoin correlation, upgrade hopes
The main reason why ADA price has jumped in the past few days is its close correlation with Bitcoin. After bottoming at $19,800 this month, Bitcoin has recovered to over $28,000. It is currently sitting at the highest level since June last year. In most periods, altcoins like Cardano tend to have a close correlation with BTC.
A likely reason why BTC jumped was the perception that it was now a safe haven in times of trouble. Recently, we have seen numerous challenges in the financial market. Inflation continued falling in February but the decline was not quick enough. It remains above the Fed’s target of 2.0%.
The biggest risk in the market is on the banking sector, where several banks have fallen. The most recent bank failure was Credit Suisse, the second-biggest bank in Switzerland. In the US, banks like Silicon Valley Bank and Signature Bank have all crashed recently.
Read more: How to buy Cardano.
Therefore, some investors believe that Bitcoin is a good safe haven to invest in periods of trouble. Others strongly believe in gold, whose price has crossed the key resistance point at $2,000 during the crisis.
As such, as I wrote in my Tron price prediction, Cardano will also react to the upcoming interest rate decision by the Fed. A more hawkish Fed will see the coin pare back gains and vice versa.
Cardano price has also jumped because of the recently unveiled upgrade. The dynamic peer-to-peer upgrade will provide bidirectional usage of block-producing nodes and relay nodes.
Cardano price prediction
Technically, ADA price is now sitting at the 61.8% Fibonacci Retracement level on the four-hour chart. The price has moved slightly above the key resistance point at $0.3675, the highest point on March 14. It has jumped above the 50-period moving average while the MACD has moved above the neutral point.
Therefore, Cardano will likely have a bullish breakout if buyers manage to move above the key resistance point at $0.3875. If this happens, the next key level to watch will be at $0.42, the highest point in February. This price is about 13% above the current level.
