The Cardano price declined sharply as the cryptocurrencies bloodbath continued on Friday. Ada is trading at $1.2750, which is a few points above its lowest level during the weekend. The coin has crashed by more than 58% from its highest level this year. As a result, its total market capitalization has fallen to more than $42 billion.
Cryptocurrency sell-off
Last week, the price of most cryptocurrencies tumbled sharply as investors reflected on the relatively hawkish statement by Jerome Powell. When testifying in Congress, Jerome Powell hinted that the bank would accelerate its tightening process.
Bitcoin and other cryptocurrencies then bounced back this week as investors rushed to buy the dips. However, the past three days have not been good for most coins. According to CoinMarketCap, the total market capitalization of cryptocurrencies has crashed to about $2.2 trillion. This means that they have lost more than $800 billion in the past few weeks.
The overall underperformance of cryptocurrencies explains why the Cardano price has also retreated. This decline is happening as investors wait for the upcoming US consumer inflation numbers that will come out later today.
These numbers are expected to show that American inflation rose from 6.2% in October to about 6.8% in November. This will be the highest inflation in the United States in the past few decades. The core CPI, which excludes the volatile food and energy prices, is expected to rise to 5%.
The numbers are important because they come a few days before the Federal Reserve is set to start its final meeting of the year. Strong US inflation numbers will provide the Fed more ammunition to embrace a tighter monetary policy.
In this meeting, the bank will likely signal that it will continue slowing down the pace of asset purchases. It will also signal that it will hike rates next year. Such a hawkish tone is often negative for Cardano price because it is a risky asset.
Cardano price prediction
The daily chart shows that the Ada price has been in a major bearish trend recently. Along the way, the coin has managed to move below the 25-day and 50-day moving averages. It has also moved below the key support level that is shown in black. It even did a break and retest pattern by retesting this level.Therefore, as I have written before, the overall outlook for the Cardano price is bearish until it finds a bullish catalyst.
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