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Key Insights:
- Cardano (ADA) dropped 1.88% on Friday following a 0.75% loss the previous day, ending the session at $0.261.
- Despite bullish IOHK updates, the ongoing SEC activity, and Fed Chair Powell’s hawkish stance present challenges for ADA.
- SEC’s plan to appeal the Judge Torres ruling on XRP has dampened buyer appetite.
Friday Overview
Cardano (ADA) fell by 1.88% on Friday. Following a 0.75% loss on Thursday, ADA ended the session at $0.261. A mixed start to the day saw ADA rise to an early high of $0.271 before sliding to a low of $0.259.
Input Output Weekly Development Report Delivers Bullish Results
The Weekly Development Report drew interest on Friday. Input Output HK (IOHK) released the weekly development report. According to the August 25 Weekly Development Report,
- Projects building on the Cardano network rose by three to 1,277 over one week.
- The number of projects launched on the Cardano network increased by one to 138.
- Native tokens stood at 8.75 million, up from 8.70 million one week prior.
- Token policies increased from 78,245 to 78,465.
- Transactions increased from 73.5 million to 73.9 million.
The increase in projects building on the Cardano network was above recent trends, providing ADA price support.
Fed Chair Powell and SEC Activity Remain Headwinds
On Friday, Fed Chair Powell tested buyer appetite by delivering a hawkish outlook on Monetary policy. The Fed Chair opened the door to more interest rate hikes, leaving ADA and the broader crypto market in negative territory.
The ongoing SEC assault on the US digital space remained a headwind, with ADA revisiting sub-$0.260 for the sixth time this month. Investor sentiment toward SEC plans to appeal the Judge Torres ruling on XRP has weighed on buyer appetite. The SEC threw ADA into the SEC Securities Basket earlier this year.
The outcome of the ongoing SEC v Coinbase (COIN) and SEC v Binance will also influence price action. An SEC win over Coinbase could significantly alter the US crypto market landscape.
This year, the SEC filed charges against Coinbase for operating as an unregistered securities exchange, broker, and clearing agency, among other SEC charges.
The Saturday Session
We expect ADA to track the broader market today. While the Weekly Development Report provided some positive figures, investor angst over the SEC and the lack of a US crypto regulatory framework will test buyer appetite.
However, IOHK updates could support a breakout. Investors are responsive to Cardano network-related news. The news of a high-profile project launching on the Cardano network would deliver a breakout session.
ADA Price Action
Daily Chart
The Daily Chart showed ADA at the upper level of the $0.260 – $0.255 support band. However, ADA sat below the 50-day and 200-day EMAs, sending bearish near and longer-term price signals.
Looking at the 14-Daily RSI, the 36.45 reading signaled a bearish sentiment. Aligned with the EMAs, the RSI signals an ADA fall through the $0.260 – $0.255 support band to give the bears a run at sub-$0.250. However, an ADA return to $0.265 would bring $0.280 and the $0.284 – $0.287 resistance band into view.
4-Hourly Chart
Looking at the 4-Hourly Chart, ADA sits at the upper level of the $0.260 – $0.255 support band. However, ADA hovers below the 50-day and 200-day EMAs, affirming bearish near and longer-term price signals.
Looking at the 14-Daily RSI, 43.06 reflects a bearish sentiment, with selling pressure outweighing buying pressure. Aligned with the EMAs, the RSI signals an ADA fall through the $0.260 – $0.255 support band to bring sub-$0.250 into play. However, a move through the 50-day EMA would support a return to $0.270.
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