The Cardano price sell-off acceleratedon Tuesday as the decision by China to crackdown on cryptocurrencies continued to send shockwaves in the industry. The ADA price declined to $1.0250, which was the lowest level since May 23. It has dropped by more than 57% from its all-time high, bringing its total market capitalization to more than $33 billion. Other popular cryptocurrencies like Bitcoin, Ethereum also dropped.
China crackdown on cryptocurrencies
In the past few years, China has transformed itself from a fledgling economy to the most important in the world. The country has a population of more than 1.5 billion and is one of the fastest-growing economy in the world. It also has the infrastructure and relatively affordable power and is also the biggest buyer of items. This has made the country a favorite among many cryptocurrency miners and professionals.
Cryptocurrency prices, including Cardano, are falling after China accelerated its cryptocurrency crackdown. The country ordered companies like banks and fintech firms like Alipay to step-up their crackdown on accounts that deal with cryptocurrencies. As I wrote yesterday, this was a notable thing since the country has more than 60% of the Bitcoin mining share. As such, investors are worried that the decision will lead to more supply as Chinese holders dump their crypto assets.
Cardano price is also falling because of fears of high interest rates. In a statement last week, the Federal Reserve said that it will start hiking interest rates in 2023, earlier than the expected 2024. High interest rates are usually negative for cryptocurrencies and other risky assets like growth stocks. So, what next for Cardano price?
Cardano price prediction
The daily chart shows that the ADA price has been in a strong downward trend recently. It has dropped by almost 60% from its all-time high. Further, the coin has dropped below the 50-day moving average. And today, it moved below the 200-day EMA, signalling that bears are in control. The two lines of the MACD have also declined substantially. It is also approaching the 61.8% Fibonacci retracement level.
Therefore, Cardano will likely keep falling as bears targer the 78.6% retracement level at $0.60, which is about 40% below the current level. This prediction will be invalidated if the price moves above the 50% retracement at $1.2700 or if Bitcoin manages to move above $32,000.