ADA Price Prediction: Contagion Risk Brings Sub-$0.300 Back into Play

Key Insights:

• On Sunday, ADA slid by 4.88%, marking the third loss from seven sessions.
• After a quiet Saturday, contagion risk resurfaced on Sunday.
• The technical indicators remained bearish, with ADA sitting below the 50-day EMA, leaving sub-$0.300 in view.

On Sunday, ADA slid by 4.88%. Reversing a 0.61% gain from Saturday, ADA ended the week down 5.17% to $0.312. Notably, ADA fell short of $0.340 for the fourth time since the collapse of FTX.

Tracking the broader crypto market, ADA rose to an early morning high of $0331. However, coming up short of the First Major Resistance Level (R1) at $0.333, ADA slid to a late low of $0.310. ADA fell through the First Major Support Level (S1) at $0.322 and the Second Major Support Level (S2) at $0.316 to end the day at $0.312.

Cardano network news took a back seat, with contagion fear gripping investor sentiment.

Cardano Network News Fails to Comfort Investors

After two range-bound sessions, FTX news updates weighed on Sunday. In particular, the news of FTX owing $1.45 billion to its top ten credits impacted investor sentiment. The figures raised the prospects of more crypto platforms  facing liquidity issues and possible bankruptcy. However, the identities of the creditors were unclear.

The latest FTX news overshadowed the news of EMURGO, Cardano’s commercial arm, planning the launch of a US Dollar-backed stablecoin. There were also no weekly development updates to distract investors.

ADA Price Action

This morning, ADA was down 2.24% to $0.305. A bearish start to the day saw ADA fall from an early high of $0.313 to a low of $0.304.

Technical Indicators

ADA needs to move through the $0.318 pivot to target the First Major Resistance Level (R1) at $0.325 and the Sunday high of $0.331. A return to $0.330 would signal a breakout session. ADA would also need the support of the broader crypto market to break out from R1.

In case of an extended rally, the Second Major Resistance Level (R2) at $0.339 and $0.340 would come into play. The Third Major Resistance Level (R3) sits at $0.360.

Failure to move through the pivot would leave the First Major Support Level (S1) at $0.304 in play. However, barring a contagion-fueled sell-off, ADA should avoid sub-$0.295. The Second Major Support Level (S2) at $0.297 should limit the downside.

The Third Major Support Level (S3) sits at $0.276.

This morning, the EMAs and the 4-hourly candlestick chart (below) sent a bearish signal.

ADA sat below the 50-day, currently at $0.332. The 50-day EMA slid back from the 100-day EMA, with the 100-day EMA falling back from the 200-day EMA, delivering bearish signals.

A move through R1 ($0.325) would give the bulls a run at the 50-day EMA ($0.332) and R2 ($0.339). However, failure to move through the 50-day EMA would leave sub-$0.300 in view.