In 2019, the Federal Reserve made a rate cut that resulted in a 57% drop in the value of Cardano. This downward trend continued for several months, with only a brief period of recovery. The market downturn during the COVID-19 pandemic further exacerbated these declines. The upcoming rate cut by the Federal Reserve is expected to have a similar effect on Cardano, potentially leading to a multi-month decline that could last until early 2025.
With public debt increasing to nearly $35 trillion and interest rates standing at 5.33%, more than double the 2019 levels, the stage is set for a significant impact on Cardano. The correlation between traditional finance and the cryptocurrency market has been evident in the past, particularly during the 2019 rate cut. Current data from the CME suggests that another rate cut is on the horizon, signaling potential trouble ahead for Cardano.
A deeper analysis of Cardano’s technical indicators reveals concerning signals for the cryptocurrency. The monthly Stochastic RSI and MACD are both displaying bearish patterns, indicating a potential downward trend. The Visible Range Volume Profile (VRVP) also points to weak support levels for Cardano, with significant resistance at the $0.15 mark.
While Cardano currently sits within a macro Fibonacci golden pocket, offering some support, the cryptocurrency has already fallen below the 78.6% retracement on other Fibonacci levels. This raises doubts about the strength of the current support zone. A more robust support level lies at $0.2349, but a drop to that level would still represent a 25% decline from the current price of $0.315.
Given the potential risks and uncertainties surrounding Cardano, investors may want to adopt a more cautious approach. Waiting for the price to drop below the $0.2951 golden pocket before shorting could provide a safer entry point. This strategy allows for a more calculated move, especially if Cardano sees a short-term uptrend while holding above the golden pocket. However, if the price falls below this level, shorting down to $0.2349 could be a more strategic move.
While the exact impact of the Federal Reserve rate cut on Cardano remains uncertain, the historical data and technical indicators suggest that the cryptocurrency could face significant downside in the coming months. Investors should carefully consider their trading strategies and risk tolerance in light of these potential developments.
Leave a Reply