- Cardano has retraced its October rally.
- Despite mounting interest from market participants, ADA’s hull is pointed towards the yearly low at $0.237.
- Investors are on edge, hoping for positive news surrounding CPI and PPI numbers, which could help ADA regain its footing.
Cardano kicked off October on a promising note, mirroring Bitcoin’s remarkable rally by pushing above $0.27 after a consistent decline spanning two months. The upswing, dubbed ‘Uptober’ by many, kindled hopes of ADA reaching the coveted $0.3 level it lost in early August.
However, Cardano’s bullish momentum, along with the optimism surrounding it, soon ebbed away as ADA turned its direction toward the yearly lows.
Cardano Retraces its Rally
Cardano staged a remarkable comeback this month, surging 10% from $0.24 to $0.27 and shaping up a very optimistic bullish channel. The rally sparked optimism among investors and market participants, as evidenced by increased network activity and open interest.
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Per data aggregator IntotheBlock, Cardano witnessed an impressive 60% surge in Daily Active Addresses during the first week of October. Concurrently, ADA Open Interest soared by 33% to $122 million, boasting a positive long-to-short ratio.
Yet, despite the mounting interest from market participants, Cardano’s performance remains tethered to Bitcoin, which recently slipped through the $27,000 and $28,000 levels. This weakness resonated in ADA’s price performance, which, having peaked at $0.27, retraced its entire rally and is now pointed toward its yearly low of $0.237.
Investors remain on edge, monitoring each candle, questioning: Will ADA bounce back, or are we poised to witness another low?
What’s Next For ADA?
The crypto market is expected to experience some turbulence in the following weeks. The US government is poised to unveil its Consumer Price Index (CPI) and Producer Price Index (PPI) numbers and its intentions to raise federal interest rates by year-end.
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The CPI and PPI metrics measure inflation and can have mixed effects on crypto prices. Higher-than-expected numbers can drive investors toward cryptocurrencies and other assets to hedge against the Dollar’s devaluation, potentially boosting prices. However, it could also compel the federal government to raise interest rates, counteracting the effect and further hurting the crypto market.
September witnessed a surprising 2.2% surge in the US’ annual PPI, surpassing the anticipated 1.6%. While the outcome didn’t trigger significant market upheaval, all eyes are fixated on CPI data and the FOMC meeting scheduled for October 31.
Should the CPI figures align with forecasts and the FOMC communicates a commitment to maintaining interest rates, Bitcoin and the broader crypto market could regain footing, potentially steering toward the yearly highs. Cardano could also retest $0.28 and even aim for $0.3 before the year’s end.
However, should the FOMC and CPI numbers deliver bad news, Cardano will likely aim its hull towards the liquidity at $0.21. At press time, ADA exchanged hands for $0.2462, boasting a daily trading volume of $106 million.
On the Flipside
- Market dynamics can be unpredictable, so it is important to consider alternative perspectives and opinions when evaluating the potential future performance of ADA.
- Cardano’s recent price performance has decreased its yearly growth to 0%.
- Over 91% of ADA holders remain in losses.
Why This Matters
Cardano’s price has performed poorly in contrast with its competitors, many of which have witnessed over 40% growth in the past year. The underwhelming performance could drive investors away looking for alternatives. Cardano urgently needs to initiate another rally in the following weeks, or it could risk a mass investor exodus.
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