ADA Price Prediction: Bullish Sentiment to Bring $0.420 Back into Play

Key Insights:

• ADA rallied by 4.13% on Friday to end the day at $0.403.
• A broad-based crypto rally delivered support as regulatory risk jitters eased further.
• The technical indicators remained bullish, leaving $0.450 in play.

ADA rallied by 4.13% on Friday. Partially reversing a 7.64% tumble from Thursday, ADA ended the day at $0.403. ADA fell short of $0.420 for the first time in three sessions.

A bearish start to the day saw ADA fall to an early low of $0.386. Steering clear of the First Major Support Level (S1) at $0.375, ADA rallied to a late high of $0.410. Coming up against the First Major Resistance Level at $0.410, ADA eased back to end the day at $0.403.

IOHK Weekly Development Update Disappoints

On Friday, Input Output HK (IOHK) released the Weekly Development Report.

According to the February 17 report,

• 116 projects launched on the Cardano network, unchanged from February 10 and February 3.
• Projects building on the Cardano network totaled 1,204, up by two from the previous report.
• Plutus scripts totaled 5,798, of which 719 were Plutus V2 scripts. As of February 10, Plutus scripts stood at 5,746.

Before the Vasil hard fork, the number of projects launched on Cardano had stood at 98, with 1,100 projects building on the Cardano network.

Other stats included 61.4 million transactions (Previous Report: 60.9m), 7.79 million native tokens (PR: 7.72 million), and 69,778 token policies (PR: 69,498).

While projects building on the Cardano network increased modestly, the continued upward trend remained price positive. However, the number of project launches on Cardano was negative.

Key highlights from the report included,

• Valentine (SECP) upgrade live on mainnet.
• Release of new Mithril distribution.
• Lace Desktop and Marlow Runtime are under ongoing development.

However, there were no EMURGO updates on the launch of USDA following the latest SEC move against Binance USD (BUSD). The markets expect EMURGO to launch USDA in Q1.

While the delay to the USDA launch and the Weekly Development Report were ADA price neutral – negative, easing investor jitters over increased regulatory scrutiny delivered a broad-based crypto rally.

US lawmaker scrutiny over the SEC and its regulations by enforcement continued to deliver price support. With BTC revisiting $25,000 for a second session, hopes of an end to the crypto winter could provide momentum and a near-term ADA return to $0.500.

However, downside risks remain. US crypto regulation by enforcement could deliver another sell-off until a regulatory framework is in place that supports sector growth and innovation.

The Day Ahead

IOHK updates will continue to influence. However, investors need to monitor the crypto news wires for events that could move the dial. Binance, FTX, Genesis, Silvergate Bank updates, SEC activity, and US lawmaker chatter need consideration.

ADA Price Action

This morning, ADA was up 0.50% to $0.405. A bullish start to the day saw ADA rise from an early low of $0.403 to a high of $0.407.

Technical Indicators

ADA needs to avoid a fall through the $0.400 pivot to target the First Major Resistance Level (R1) at $0.413. A move through the Friday high of $0.410 would support a bullish session. However, Cardano network updates and the broader crypto market would need to provide support.

In the event of a breakout, ADA would likely test the Second Major Resistance Level (R2) at $0.424. The Third Major Resistance Level (R3) sits at $0.448.

A fall through the pivot ($0.400) would bring the First Major Support Level (S1) at $0.389 into play. Barring another extended broad-based crypto sell-off, ADA should avoid sub-$0.380 and the Second Major Support Level (S2) at $0.376. The Third Major Support Level (S3) sits at $0.352.

This morning, the EMAs and the 4-hourly candlestick chart (below) sent bullish signals.

ADA sat above the 50-day EMA, currently at $0.387. Following the Wednesday bullish cross, the 50-day EMA pulled further away from the 100-day EMA, with the 100-day EMA widening from the 200-day EMA, delivering bullish signals.

A hold above S1 ($0.389) and the 50-day EMA ($0.387) would support a breakout from R1 ($0.413) to target R2 ($0.424). However, a fall through S1 ($0.387) and the 50-day ($0.384) would bring the 100-day EMA ($0.383) and S2 ($0.376) into play. A fall through the 50-day EMA would send a bearish signal.