As a seasoned analyst with over two decades of experience in the financial markets, I have seen my fair share of market fluctuations and trends. The recent cryptocurrency market downturn, followed by a swift rebound, is reminiscent of the wild west days of the dot-com bubble.
On Friday, the broader cryptocurrency market experienced a significant drop due to a combination of economic factors affecting global markets and overall investor mood, leading to approximately $1.42 billion worth of asset liquidations.
Over the past weekend, I observed a notable resurgence in the crypto market as several digital currencies displayed indications of recuperation. Notably, Cardano exhibited a robust recovery, with the price of its native token ADA escalating by approximately 15% and momentarily surpassing the $1 threshold.
On Friday, the Federal Reserve’s favored measure of inflation showed a decrease more than anticipated, somewhat softening the market’s dissatisfaction over the Fed’s interest rate decision announced on Wednesday.
In October, the Personal Consumption Expenditures Price Index (PCE) – which is the Federal Reserve’s preferred measure of inflation – rose slightly by 0.1%, and year-over-year, it increased at a rate of 2.4%. However, both figures came in lower than what experts had predicted.
On Wednesday, the Federal Reserve lowered its key interest rate by a quarter of a percent to a range of 4.25% – 4.5%, which is the lowest it’s been in two years. In contrast, Chair Jerome Powell and the policy team adjusted their anticipated reduction plan for 2025. Instead of expecting four decreases as initially projected, they now predict only two reductions will occur.
ADA price action
For four straight days, the price of ADA had been decreasing, but on Friday it made a significant turnaround and dipped down to $0.763 during trading. This turnaround continued into Saturday, reaching a peak of $1 during the trading session, although it slightly pulled back from this high. At the moment I’m writing this, ADA has risen by 14.05% in the last 24 hours and is now trading at $0.9579.
Currently, Cardano is fighting to reach the $1 level, and people are closely watching its progress. If it manages to break through this psychological barrier, it could lead to additional growth, potentially reaching $1.34 and even $2. However, the daily moving average of 50 at $0.877 may act as a support before the $0.76 low is reached.
As per the Messari Q3 report titled “State of Cardano Q3 2024,” we see an upward trend for Cardano’s TVL (Total Value Locked) in USD, which grew by 13.3% compared to the previous quarter, reaching a total of $231.6 million. The market cap of stablecoins increased by 5.4% during the same period, amounting to $20.7 million. Particularly noteworthy is the continued growth of USDM following its launch in March, with a QoQ (Quarter-over-Quarter) increase of 148.5%, resulting in $7.9 million. However, revenue in USD saw a decline of 31.2% to $0.51 million. This decrease was likely due to Cardano experiencing a quarterly drop of 15.9% in its average daily transactions, which now stand at approximately 43,200.
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2024-12-21 13:30