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Cardano (ADA/USD) price resumed its bearish trend as investors the market volatility and the US dollar index rose. The coin dropped to a low of $0.4555, which was slightly below this month’s high of $0.5958. As a result, its total market cap has slipped to about $15.5 billion, lower than its all-time high of over $90 billion.
Volatility resumes
Cardano price has been under intense pressure in the past few months as investors worry about several factors. First, like all other cryptocurrencies, it has slipped because of the rising fears of high-interest rates by the Federal Reserve.
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The bank has hiked rates by 225 basis points this year and hinted that it will continue raising in the coming months. Historically, risky assets like Cardano tend to underperform when the Fed is hiking rates.
In fact, this week’s decline is a continuation to what happened after the Fed published minutes of its past monetary policy meeting. The minutes showed that the bank was committed to keep hiking in a bid to lower the soaring inflation.
Second, Cardano price has declined because of the rising concerns about its use case and ecosystem. Unlike its top peers like Solana and Ethereum, Cardano activated its smart contracts in 2021. As such, it has a substantially small ecosystem and there are signs that it is shrinking.
For example, its DeFi applications have a total value locked (TVL) of just $82 million, making it the 28th biggest smart contract platform in the world. At its peak, it had a TVL of over $320 million.
Cardano has no significant market share in other blockchain industries like non-fungible tokens (NFT) and the metaverse.
Third, in line with the first point, ADA price has slipped as volatility, as measured by the VIX index has risen. The dollar index surged to over $109.30.
Cardano price prediction
The daily chart shows that the Cardano price has been in a downward trend in the past few months. In this period, it moved from an all-time high of $3 to about $0.45. It has moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved below the neutral point at 50. The coin has also formed a bearish flag pattern.
Therefore, ADA will likely continue falling as sellers target the year-to-date low of $0.40. A move above $0.50 will invalidate the bearish view.
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Image and article originally from invezz.com. Read the original article here.