ADA Price Analysis: Cardano price snaps three-day losing streak amidst market turmoil
|- Cardano price ties up with mild gains after a three-day losing streak.
- ADA is in a consolidation phase with lower highs and higher lows.
- With the RSI in overbought territory, expect a correction to the downside in search of support before swinging up to $0.40.
Cardano (ADA) price is having its first test in 2023. Central banks are the reason. Early this Wednesday morning, the Bank of Japan surprised markets with no change to its monetary policy. A few hours later, European Central Bank (ECB) member Villeroy set the record straight on market assumptions that the ECB would only hike 25 basis points in February and then halt. Villeroy would not have any of that and pushed the idea that 50-basis-point hikes would be maintained until the summer. As seen in December, the dislocation between expectations of the markets and what central bankers are saying is growing even more, and it spells issues ahead near-term.
Cardano price to cool down 7%
Cardano price has been advancing in a very technical trade since the beginning of this year. A glance at the daily performance chart will reveal that ADA has been coming down to test support before the rally continued each time since the first trading days of January. Considering price action is stalling a bit and has not touched any real pivotal levels to the upside, price action points to a small cooldown where bulls will go in search of support to get back in.
ADA would welcome that as the Relative Strength Index (RSI) is too far into overbought territory. The messages from the BoJ and Villeroy of the ECB could trigger that realization in elevating the profit taking a bit. Expect a drop back to $0.324 in search of support as it did on Friday, January 13. Let the RSI cool down to a more moderate level and advance toward $0.40.
ADA/USD daily chart
If supports at $0.324 from Friday the 13th do not work, the risk of tiered correction could be unfolding. That would mean that each time support was tested, there was a small bounce and a break below it. First up are $0.297 and $0.265, which means that big parts of the rally would be paired back and see price action for the year, hardly printing solid gains.
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