- Cardano price remained in a tight range this week.
- The US dollar index (DXY) has jumped to the highest level since June.
- Cardano's DeFi TVL has jumped to the highest level on record.
Cardano price remained in a consolidation phase on Friday ahead of the upcoming speech by Jerome Powell. ADA, the network’s token, was trading at $0.2640, a few points above this week’s low of $ 0.250. The US dollar index (DXY), on the other hand, has jumped to $104, the highest point since June.
Jackson Hole Symposium
Cardano price, like other cryptocurrencies, has been under intense pressure in the past few months. While there are many reasons for this, including regulations and low volume, the biggest reason is the Federal Reserve.
The Federal Open Market Committee (FOMC) has hiked interest rates from zero to 5.50%, the highest level in more than two decades. It did that in a bid to lower inflation, which soared to the highest level in 40 years during the pandemic.
The soaring interest rates have had major impacts in the financial market. For example, it has led to higher mortgage and credit card rates. As a result, the purchasing power of most Americans has dropped in the past few months. At the same time, it has led to use of savings and excess funds by most Americans.
Read more: How to buy Cardano.
Most importantly, the actions of the Federal Reserve have pushed bond yields at the highest level in years. Money market and CD yields have risen to over 6%. Therefore, many people have moved their funds from risky assets like Cardano to these assets.
This is one of the top reasons why Cardano and DeFi platforms in the ecosystem are lagging. Staking rewards of Cardano stands at about 3%, which is lower than what the dollar is paying.
Therefore, the statement by Jerome Powell at the Jackson Hole Symposium will be watched closely. A sign that the Fed will keep rates high will push Cardano price downwards and vice versa.
Will Cardano ADA price rise?
Caradano, unlike other blockchains, is seeing the total value locked (TVL) in its DeFi ecosystem rise. It now stands at over 745 million ADA coins, a few points below the all-time high of 766 million ADA. In dollar terms, Cardano’s TVL stands at $198 million, up from the year-to-date low of $66 million.
Turning to the 4H chart, we see that Cardano price was trading in a tight range this week. It was trading at $0.2620, a few points above this month’s low of $0.2530. The token is consolidating at the 25-period and 50-period moving averages. Therefore, the outlook for ADA price for now is bearish, with the next level to watch being at $0.2530.
