- Cardano price has crashed by ~10% from its highest point this year.
- It has formed a corrective Elliot Wave pattern on the 4H chart.
- ADA has also moved below the lower side of rising wedge pattern.
Cardano price has pulled back in the past few days as the momentum that we saw in January waned. After soaring to a multi-month high of $0.414 in February, the coin has pulled back by ~15%. The coin’s price could see elevated movements during the American session on Tuesday.
US inflation and retail sales numbers
Cardano, like other cryptocurrency prices, have been in a downward trend in the past few days. Most of these losses started when the US published strong jobs numbers in February. According to the Bureau of Labor Statistics (BLS), the economy added over 500k jobs in January. Wage growth continued rising while the unemployment rate pulled back to 3.4%.
These strong numbers meant that the Federal Reserve would continue tightening in the next few months. As part of its mandate, the Fed is meant to ensure that unemployment remains low while inflation is contained. Therefore, the bank has already achieved its mandate concerning the labor market.
But it is still fighting inflation concerns, with the headline figure being above 6%. For a long time, the Fed has targeted an inflation figure of 2%. Therefore, it means that it has a lot of work to do going forward.
Read more: How to buy Cardano.
As such, if inflation comes bigger than expected, we will likely see the Fed continue tightening. This increase could push the terminal rate to more than 5.50% in the coming months. On the other hand, if inflation comes short of estimates, cryptocurrencies like Cardano could have more room to recover.
On-chain metrics also explain why Cardano price has pulled back. For example, data shows that the total value locked (TVL) in Cardano stands at $100 million, which is higher than last year’s low of about $52 million.
In ADA terms, the TVL has jumped to 280 million, the highest point since March last year. The pace of increases has waned slightly. Other metrics like the number of account holders has pulled back as well.
Cardano price prediction
The recent ADA price crash was easy to predict. In fact, I warned about it in my last Cardano forecast in January. At the time, the coin had formed a double-top pattern. Now, looking at the four-hour chart, we see that the coin had formed a rising wedge pattern. It has moved below this wedge and is sitting slightly above the 38.2% Fibonacci Retracement point. Cardano is also in the corrective Elliot wave.
Therefore, the outlook of ADA price is bearish, with the next key level to watch being at $0.326, which is about 9% below the current level.
