Major cryptocurrencies look set to end the week with solid gains and near highs.
Bitcoin is in the mid-$21,000s and Ethereum above $1,200, with both on course for double-digit weekly gains.
Cardano lagged slightly this week and is still stuck in a consolidation (pennant) structure that could signal a future breakout.
For the most part, major cryptocurrencies look set to end the week with solid gains and near highs. Bitcoin was last consolidating in the $21,500 area, up around 12% so far this week. That means its market capitalization currently stands at around $413 billion.
Ethereum, meanwhile, was last trading well supported in the $1,220 area, up roughly 14% this week. The market cap of the world’s second-biggest cryptocurrency was last just under $150 billion. Total crypto market cap was last around $935 billion, up roughly 10% or over $80 billion on the week.
Sentiment took a turn for the better this week despite a rise in US yields and Fed tightening bets on strong US jobs and service sector survey data. US tech stocks, to which crypto prices have developed a close correlation in recent months, posted solid gains this week.
The Nasdaq 100 ended the trading week over 4.5% higher. There seems to be a growing conviction that the US and global economy is weakening towards recession and this will bring inflation back under control.
This conviction is already in the early stages of becoming a self-fulfilling prophecy, with commodity prices down sharply in recent weeks nearly across the board. This may be attracting investors back into speculative assets, despite still elevated concerns about Fed tightening and the macroeconomic backdrop.
The narrative of inflation having peaked will be tested next week with the release of US Consumer Price Inflation data. An upside surprise could see crypto prices swiftly hand back recent gains.
Cardano (ADA) Price Prediction
The native token to the Cardano blockchain ADA is still stuck within a consolidation pattern, hamstringing its gains. Since mid-June, ADA/USD has been squeezed within a pennant structure.
ADA was last trading higher by around 2.5% on Saturday near $0.48, taking its on-the-week gains to around 5.0%. That means it significantly lags Bitcoin and Ethereum, both of whom are on course for double-digit weekly gains.
Nerves about the blockchain’s upcoming Vasil hardfork upgrade, which was delayed in June, could be holding investors back. But if cryptocurrency market sentiment continues to improve, ADA has a good chance of mustering a bullish breakout.
A push above weekly highs around $0.49 per token and then the $0.50 mark could signal a pennant breakout. In that case, a swift test of the 50-Day Moving Average near $0.51 would be likely.
Cardano hasn’t been sustainably above its 50DMA since early April. A convincing push above it could this be a strong signal of a shift in the currency’s near-term momentum. The next target would then be a test of a support turned resistance area in the $0.55 region. Beyond that, the next key resistance is in the upper-$0.60s.
Of course, should US CPI data next week surprise to the upside and trigger another crypto market puke, a bearish breakout is possible. A sustained break below $0.43 would likely result in a quick test of sub-$0.40 annual lows.
As noted in previous articles, a break below here could trigger a cascade of selling pressure. There isn’t much by way of significant support until underneath $0.20.
This article was originally posted on FX Empire