Cardano (ADA) will undergo a major network update called “Vasil” on September 22, potentially making its blockchain more scalable and cheaper. However, this news has failed to create any decisive reversal in the ADA market.
Macro factors depend on ADA’s best upside scenario
By extension, the price of ADA has risen nearly 3.5% to $0.51 since the Vasil launch announcement, which includes its near-complete wipeout after a nearly 14% rally. In other words, traders initially bought the Vasil hype, but were quick to exit the market, as shown by the price action below.
Cardano founder Charles Hoskinson blamed The “macro factor” for ADA’s poor performance despite Vassil Euphoria, noting that the crypto markets, overall, “have become disconnected from reality.” He added:
“Cardano has never been stronger and there are obviously many other projects solid across the industry, yet you don’t see that reflected – just a sea of red.”
The prepared statements appeared as riskier assets braced for another deep decline in the days leading up to the Federal Open Market Committee (FOMC) meeting on September 20 to September 21.
Market to accept Federal Reserve officials will vote on September 21 to raise benchmark interest rates further by 0.75%. Overall, the US central bank is looking to raise the rate from 3.75% to 4% by the end of 2022.
The high rate environment could hurt Cardano and other top-cap crypto assets, as it could increase the appeal of cash-based instruments among investors.
Is There A “Mini” Cardano Rally Ahead?
From a technical point of view, Cardano Vasil is set to undergo a mini rally in the days leading up to the hard fork.
On the four-hour chart, ADA price is testing a support confluence for a potential rally. This confluence is made up of a multi-week ascending trend line and a support bar as highlighted in the chart below.
Suppose ADA rebounds from confluence. Then, an immediate upside target for ADA is around $0.50. This level is the meeting point of two resistance levels: a “multi-week descending trend line” and a “mid-level target” that has served as a price range since mid-August.
Meanwhile, a break above $0.50 could cause ADA bulls to test $0.53 as their primary upside target, a level that has a significant history as resistance. In other words, ADA is likely to outperform the Vassil hard fork by 15% compared to today’s price.
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Although ADA looks weak on its longer-term charts, its three-day performance suggests the presence of a bearish continuation pattern known as a “descending triangle”.
According to the rules of technical analysis, ADA risks a fall to $0.26 if it decisively breaks below the lower trend line of its descending triangle. In other words, there is a price drop of about 40% from the current prices.
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