Cardano (ADA/USD) price crashed hard amid rising concerns about cryptocurrencies. It pulled back to a low of $0.3047, the lowest level since January 11. The coin has plunged by more than 27% from the highest level this year, meaning that it has moved into a deep bear territory.
US non-farm payrolls (NFP) data
Cardano price has been in a bearish trend in the past few weeks. This decline happened as an ill wind blew in the crypto industry. For example, Silvergate Capital, the company that used to bank for crypto companies announced that it will liquidate. This was the biggest crypto news since the collapse of FTX.
The next important catalyst for the ADA price will be the upcoming US non-farm payrolls data scheduled for Friday. Economists polled by Reuters expect that the economy added more than 200k jobs in February while the unemployment rate remained unchanged at 3.4%.
These numbers will be important because of Jerome Powell’s testimony that we wrote about here. When talking to congress, the Fed Chair noted that the bank was prepared to hike interest rates above where investors were expecting. As such, analysts started pricing in a situation where the Fed will hike rates by 0.50% this month.
On the second day of testimony, Powell insisted that the Fed will be data-dependent in the coming meetings. As such, one of the data it will focus on will be the upcoming US non-farm payrolls data. If the labor market remains extremely red hot, it means that the bank will need to continue hiking.
It will mean that the Fed will struggle to fight inflation with the unemployment rate at 3.4%. The US will publish the next key inflation numbers on Tuesday next week. Therefore, if inflation numbers also keep rising, the Fed will continue hiking, which will be a bearish thing for Cardano prices.
Cardano price prediction
The 4H chart shows that the ADA price formed a double-top pattern at $0.4130. In price action analysis, this pattern is usually an extremely bearish one. Since then, Cardano has managed to move to the 61.8% Fibonacci Retracement level. It has moved below all moving averages, signaling that bears are still in control.
Therefore, by measuring the double-top area, we can estimate that Cardano price will continue falling and reach the key level at $0.2881. A reversal will only happen if it moves to this level and it will depend on how the inflation numbers come out.