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ADAUSD Under Pressure from General Market Negative Factors

12/22/2022 2:03 PM

The ADA/USD pair is falling along with the main part of the cryptocurrency market, having tested 0.2441 (Murrey levels [2/8]) this week. The coin is under pressure from general market negative factors: the consequences of the bankruptcy of the FTX digital exchange and the results of the last meeting of the US Federal Reserve.

Last week, the US regulator confirmed the need to continue raising the interest rate and keep it at high levels until at least 2024: investors' expectations for softening hawkish rhetoric did not materialize, and the dollar resumed strengthening against alternative assets. The consequences of the cessation of FTX are expressed, first of all, in the loss of confidence on the part of traders: by the middle of this month, 200.0K BTC worth about 3.4B dollars were withdrawn from the market, not counting other tokens, and soon this process is more likely everything will continue. Also, many cryptocurrency companies associated with the platform are experiencing problems: for example, market maker Auros announced restructuring its activities due to the company losing access to 20.0M dollars blocked on the bankrupt crypto exchange. According to Coinbase's Cryptocurrency Market Outlook 2023 report, market conditions will continue to push investors to leave altcoins for safer currencies – BTC and ETH, and the price of ADA will remain under pressure in the medium term.

The trading instrument is moving within the long-term downward channel. Consolidation of the price below 0.2441 (Murrey levels [2/8]) will give the prospect of further decline to 0.2197 (Murrey levels [1/8]) and 0.1953 (Murrey levels [0/8]). The key "bullish" seems to be 0.2929 (Murrey levels [4/8], middle line of Bollinger bands). Its breakout will give the prospect of further growth to 0.3173 (Murrey levels [5/8]) and 0.3418 (Murrey levels [6/8], the upper limit of the downward channel).

Technical indicators allow for a decline: Bollinger Bands are directed downwards, the MACD histogram is increasing in the negative zone, and Stochastic is horizontal in the oversold zone.

Resistance levels: 0.2929, 0.3173, 0.3418. | Support levels: 0.2441, 0.2197, 0.1953.

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