ADA, DOT, ETH, and SOL Weekly Review – Powell Delivers August Lows

Key Insights:

• It is another bearish week for the crypto market, with the total market cap down by $59 billion to $945 billion.
• US economic indicators delivered crypto market support before a Fed Chair Powell-fueled Friday crypto meltdown.
• Technical indicators have turned bearish, indicating further price falls should sentiment towards the Fed persist.

It has been a bearish week for riskier assets and the crypto market. While US economic indicators delivered mixed signals, the latest string of economic indicators had raised the hope of a more dovish Fed ahead of Fed Chair Powell’s Friday speech.

A sharper contraction across the US services sector raised the prospects of a US economic recession. In August, the services PMI slid from 47.3 to 44.1. Economists forecast an increase to 49.2. While the stat was negative, a positive crypto market reaction highlighted investor angst toward Fed monetary policy.

Other stats were mixed. While core durable goods orders, jobless claims, and Q2 GDP numbers beat forecasts, personal spending and inflation figures were softer. However, the combination was crypto market positive. Softer inflation figures came out shortly before Fed Chair Powell’s speech, supporting the crypto market before the meltdown.

However, Fed Chair Powell sent riskier assets tumbling on Friday, with forward guidance on interest rates and the risks to labor market conditions and the economy doing the damage.

Fed Chair Powell delivered a warning to the markets of the Fed’s commitment to bring inflation to target. Powell talked of the likely fallout from the Fed’s goal, including the impact on labor market conditions. The Fed Chair also removed any hope of a policy reversal by highlighting the need for a period of sustained below-trend growth alongside a weaker labor market to tame inflation.

In the current week, the total crypto market cap is down $58.7 billion (5.84%) to $945.3 billion. Crypto investors responded to the latest shift in sentiment towards the US economy and Fed monetary policy.

Things were not much better for the US equity markets. On Friday, the NASDAQ slid by 3.94% to end the week down by 4.4%.

For the current week, Monday through Sunday morning, Solana (SOL) leads the way down, with losses of 13.96. Cardano (ADA), Ethereum (ETH), and Polkadot (DOT) are also struggling in the week. ETH is down 7.82%, with ADA and DOT seeing losses of 3.24% and 5.38%, respectively.

Cardano ADA

For the current week, Monday through Sunday morning, ADA was down 3.24% to $0.448. A choppy week saw ADA strike a Thursday high of $0.482 before sliding to a Saturday low of $0.425.

The bearish week saw ADA fall to a new August low to bring sub-$0.40 and the May and current year low of $0.384 into play.

While Fed Chair Powell did the damage, Vasil hard fork updates provided support. According to PoolTool, 70% of Cardano SPO nodes have upgraded to v1.35.3, up from 68% on Saturday, 62% on Friday, and 53% on Thursday. 75% is the target.

On a trend analysis basis, ADA would need to break out from the August high of $0.595 to move through the June high of $0.6688 to target the May high of $0.906. However, a fall through this week’s August low of $0.425 would bring the May and the current year low of $0.384 into view. Updates on the Vasil hard fork will remain the key driver.

Looking at the EMAs, based on the 4-hourly, it was a bearish signal. On Sunday, ADA sat below the 50-day EMA, currently at $0.465. Following the bearish cross of the 100-day EMA through the 200-day EMA, the 50-day EMA and the 100-day EMA fell back from the 200-day EMA to deliver negative price signals.

A pullback of the 50-day EMA from the 200-day EMA gives the bears a look at sub-$0.40 and the 2022 low ($0.384).

However, an ADA breakout from the 50-day EMA ($0.465) would ease selling pressure and bring $0.50 back into view.

Polkadot (DOT)

Monday through Sunday morning, DOT is down 5.38% to $7.03. DOT rose to a Wednesday high of $7.77 before sliding to a Saturday and a new August low of $6.80. Finding support going into the weekend, DOT returned to $7.0 levels.

While Fed Chair Powell weighed, investor sentiment towards Polkadot and news of the new parachains delivered support.

Looking at the trends, a DOT move through the August high of $9.68 would support a run at $10.00 and the June high of $10.73. From $10.73, DOT would have a clear run at the May high of $16.44.

However, DOT would need to steer clear of the August low of $6.80 to avoid a continued retrace to the current year’s low of $5.99. While network updates will continue to influence, sentiment towards Fed monetary policy will remain a key focal point as investors shift attention back to US economic indicators.

Looking at the EMAs, based on the 4-hourly, the signal was bearish. DOT sat below the 50-day EMA, currently at $7.48. Following a bearish cross on Tuesday, the 100-day EMA fell back from the 200-day EMA, with the 50-day EMA sliding back from the 200-day EMA, both DOT price negatives.

A further pullback of the 50-day EMA from the 200-day EMA would bring the current year’s low of $5.99 into play.

However, a DOT move through the 200-day EMA and a return to $8.00 would signal a near-term bearish trend reversal and a run at the August high of $9.68.

Ethereum (ETH)

For the current week, Monday through to early Sunday, ETH was down 7.82% to $1,491. ETH struck a Thursday high of $1,722 before sliding to a Saturday and new August low of $1,447.

Updates on the Ethereum Merge took a back seat as investors responded to US economic indicators and Fed Chair Powell.

Looking at the trends, a breakout from the August high of $2,013 and move through to $2,500 would target the May high of $2,968 and $3,000. A return to $3,000 would give the bulls a run at the April high of $3,582.

A fall through the August low of $1,447 would bring the June and the current year’s low of $880 into view.

Looking at the EMAs, based on the 4-hourly, it was a bearish signal. ETH sat below the 50-day EMA, currently at $1,628. Following Friday’s bearish cross, the 50-day EMA fell back from the 200-day EMA. The 100-day EMA narrowed to the 200-day EMA, both ETH price negatives.

A bearish cross of the 100-day EMA through the 200-day EMA would deliver another bearish week. However, a move through the 50-day EMA could see ETH breakout from the 200-day EMA and the 100-day EMA to test resistance at $1,800.

Solana (SOL)

Monday through Sunday morning, SOL was down 13.96% to $31.38. A range-bound start to the week saw SOL rise to a Monday high of $36.55 before sliding to a Saturday low of $30.8575.

There were no major network updates, leaving SOL in the hands of Fed Chair Powell.

Looking at the trends, a return to $50 would give the bulls a run at the May high of $95.19. SOL would need plenty of support to break out from $75.

However, a fall through the August low of $30.86 would give the bears a run at the June and the current year’s low of $25.78.

Looking at the EMAs, based on the 4-hourly, it was a bearish signal. SOL sat below the 50-day EMA, currently at $35.12.

The 50-day EMA slid back from the 200-day EMA, with the 100-day EMA pulling back from the 200-day EMA, both price negatives.

A further pullback of the 50-day EMA from the 200-day EMA would support a slide to sub-$30. Another bearish week would bring the June 14 current year low of $25.78 into view.

However, an SOL move through the 50-day EMA (35.18) would support a run at the 100-day EMA (37.19). In the event of a move through the 100-day EMA, we could see a momentum-driven rebound to support a run at the 200-day EMA ($38.66) and $40.