- Cardano price has been in a steep sell-off in the past few months.
- ADA has crashed from $3 to below 50 cents.
Cardano price has been in a strong bearish trend in the past few days. ADA crashed to a low of $0.4388, which was the lowest level since May 12th of this year. It has retreated by more than 85% from the highest level on record, meaning that its investors have lost more than $80 billion in the past few months.
Why has Cardano crashed?
Cardano, like other cryptocurrencies, has been in a strong bearish trend in the past few months as its demand crashes.
This price action is in line with how other coins like VeChain, Bitcoin, and Ripple have performed. It is also similar to the recent crash of many American stocks like Carvana, Robinhood, MicroStrategy, and Boxed.
Investors have simply moved away from Cardano and other cryptocurrencies as they continue worrying about the Fed and a potential recession.
Conditions are ripe for a recession in the United States. For example, the unemployment rate has fallen close to its record low while inflation has surged to the highest point in 40 years. The prices of key items like gasoline have surged to a record high.
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At the same time, analysts believe that the Federal Reserve will continue tightening this week. Some believe that it will hike by about 0.75%, which will be the biggest increase in decades. Historically, cryptocurrencies and other risky assets underperform in a period of high rates.
Cardano price has also crashed as investors worry about its utility now that key sectors in blockchain have been shaken. These sectors include the metaverse, decentralized finance (DeFi), and NFTs. A closer look shows activity in existing platforms has declined by over 50%.
Meanwhile, the ongoing crisis among well-known names in the industry like BlockFi and Celcius has pushed more people away from cryptocurrencies.
Cardano price forecast
On the daily chart, we see that the ADA price has been in a steep sell-off in the past few months. The coin is trading at $0.466, which is slightly below the 25-day and 50-day moving averages. A closer look shows that the coin is approaching the key support level at $0.39, which was the lowest level in May.
The overall outlook is bearish. Therefore, the next key support level to watch will be at $0.3900. A drop below that level will open the possibility of the coin moving below $0.30 in the near term.
