Cardano Price Prediction: Was ADA's post-FOMC euphoric rally a bull trap?
|- Cardano price got rejected from the upper boundary of a newly formed descending parallel channel.
- The 14.62% FOMC-driven rally allowed traders to short ADA.
- Cardano price bleeding may continue as long as it stays under the Ichimoku cloud.
Cardano price moved 14.62% following the FOMC meeting on Wednesday, which resulted in an interest rate hike of 75 basis points. A euphoric rally also engulfed the entire market, with the total market capitalization reclaiming the $1 trillion mark.
The increase in cryptocurrency prices immediately after interest rate hikes has become a norm over the last few months. However, crypto assets tend to feel pressure after a few weeks as investors make capital adjustments.
What's next for cardano price?
The smart contracts token is doddering marginally above $0.50 at the time of writing. The long Exponential Moving Average (EMA) provides support after ADA tagged the descending channel's upper boundary at the end of the Asian session on Thursday.
The down leg is bound to stretch further, especially if Cardano price cracks the buyer congestions at $0.50. As the Relative Strength Index (RSI) forms a bearish divergence below the moving average, odds will flip in favor of an extended correction.
ADA/USD six-hour chart
Several support areas are in line to cushion buyers at the confluence formed by the short EMA and the channel's middle boundary. If push comes to shove, investors should acclimatize to Cardano price, exploring downhill levels at $0.45 and $0.42, respectively.
Are investors preparing to Sell the news?
Some investors booked early profits as Cardano price surged 14.62% to $0.52. Akash Girimath, an analyst with FXStreet, recently said that ADA was forming a bearish divergence which could lead to increased short positions.
The retracement will likely continue until Cardano price finds a solid footing, aided by the euphoria surrounding the Vasil hard fork, which will bring major upgrades to the blockchain, and is expected before August. According to Cointelegraph, who quoted TradingShort, the token could plunge 20%.
"Based on 1D RSI terms, we also seem to be on the third (3) and final leg below the collapse."
"So if ADA holders want to avoid this, they need to see the price break above the 1D MA50 and sustain trading above it for a week at least. Otherwise, completing a -93% drop from the top is possible at around 0.200," TradingShot added.
ADA/USD daily chart
The upcoming Vasil hard fork was initially scheduled for release on June 29, but due to technical issues, the launch was delayed. Cardano is yet to announce another release date; however, the team had earlier mentioned that the hard fork would happen in the last week of July.
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