Why is Cardano price down today?

1 week ago 5

Cardano (ADA) price traded in a second straight daily bearish session on Jan. 13, dropping 7% over the last 24 hours to trade at $0.930. A bearish technical setup and several onchain signals suggest that ADA could see a deeper correction in the coming days.

Cryptocurrencies, Dollar, SEC, Markets, Cardano, Tech Analysis, Market Analysis, Altcoin Watch

Let’s look at the factors driving ADA price down today.

Risk-off mode and broader crypto market sell-off

The bearish sentiment on Jan. 13 was not only exclusive to Cardano. The overall cryptocurrency market has also been experiencing a downturn, with a significant sell-off in risk assets as markets continue to price in a more hawkish stance by the US Federal Reserve.

Bitcoin (BTC) and Ether (ETH) prices traded in red on Monday after declining more than 0.8% and 2% in the past 24 hours.

Other top-cap cryptocurrencies, including BNB Chain’s BNB, XRP (XRP), and Dogecoin (DOGE), have also posted significant losses over the last 24 hours.

Similarly, the total crypto market cap has dropped by 1.73% over the last 24 hours to at $3.25 trillion at the time of publication.

This market drawdown comes as a series of stronger-than-expected US macroeconomic data dented hopes of capital inflows into the crypto space.

As a result, futures markets predict that the Fed will now be less likely to cut interest rates as much or as quickly as previously thought. The latest data from CME Group’s FedWatch Tool put the odds of even a small 0.25% cut at the Fed’s January meeting at just 2.7%.

The sentiment suggests that there is a growing expectation of fewer rate cuts in 2025 than previously anticipated, with market participants now pricing in only 1-2 cuts for the year.

“Interest rate futures are now pricing in a new low of 1-2 rate cuts in 2025,” said capital markets commentator The Kobeissi Letter in a Jan. 13 post on X, adding:

“Rate hikes could be back on the table, and markets aren’t liking it.”

Weak onchain metrics underlie ADA’s downside

Data from Artemis reveals that the drop in ADA price coincides with a drop in investors’ interest and liquidity on the Cardano chain.

ADA’s daily DEX trading volume fell from $31.3 million on Dec. 12, 2024, to $4.9 million on Jan. 12, the lowest level since Nov. 7.

Similarly, daily active addresses decreased by 70% from approximately 96,700 to 29,500 over the same period.

Additional data from DefiLlama suggests that total value locked (TVL) on the Cardano network plummeted from $701.4 million on Dec. 3, 2024, to $492.7 million on Jan. 13.

The decline in daily active addresses, DEX volume and TVL coincides with ADA’s 30% price drop over the same period.

ADA bull flag places downward target at $0.72

As shown below, ADA price technicals show a bear flag pattern on the four-hour candle chart.

A bear flag is a bearish continuation setup that forms after the price consolidates inside an up-sloping range following a sharp price decline.

The bear flag broke down during the Asian trading hours on Jan. 13 when the price slipped below the lower trendline on the flag at $0.945.

ADA price could now drop by as much as the previous downtrend’s height. This puts the lower target for ADA price at $0.726— levels last seen in mid-November 2024.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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