- Cardano price has drifted downwards in the past few days.
- The US dollar index has jumped to the highest point in two weeks.
- The CBOE VIX index has also drifted upwards as the debt ceiling issue continues.
Cardano price dipped sharply as a somber mood spread in the financial market as the debt ceiling talks floundered. ADA dropped to a low of $0.3614, which was much lower than this month’s high of $0.4616. Other cryptocurrencies like COCOS, FTM, and FTX Token have also retreated sharply.
US dollar index rebounds
Cryptocurrencies were not the only financial assets in the red. American stocks dropped sharply, with the Dow Jones falling by 240 points and the tech-heavy Nasdaq 100 index slipping by 140 points. At the same time, the VIX index jumped by over 12% while the dollar index (VIX) soared by more than 30 basis points.
The VIX and DXY indices tend to rise when there are risks in the market. The current big risk is about the US debt ceiling. There are concerns that politicians in Washington will not reach an agreement before the June 1 deadline.
Negotiators are still far apart as conservatives insist on spending cuts or freeze. Republicans have insisted that any deal must lead to a sharp decline in discretionary sending next year than this year. They have recommended ending some of Joe Biden’s spending policies like the student debt relief and funding to the IRS.
Still, analysts believe that the two sides will ultimately reach a deal, which will be a positive thing for Cardano and other financial assets.
Therefore, the current Cardano price action does not imply that the network has major issues. In fact, data shows that Cardano’s ecosystem is thriving. For example, its DeFi ecosystem is doing well, with its total value locked (TVL) soaring to $194 million. The biggest dApps in the ecosystem are Minswap, Indigo, WingRiders, and MuesliSwap.
Cardano price prediction
The daily chart shows that ADA price has been in a downward trend in the past few days. The coin has managed to cross the important support level at $0.4248, the highest level on February 25. It has also crossed the 50-period moving average while the volume has been falling. The coin has also dropped below the VWAP indicator.
Therefore, Cardano will likely continue falling as sellers target the key support level at $0.34. This decline will happen as the debt ceiling issue continues. Since it will ultimately be resolved, the coin will bounce back after that.
