Cardano price has been under intense pressure for the past few days as Silvergate poses for a potential bankruptcy. ADA has slipped by more than 7% in the past week but remains 32% higher in the year to date. At the time of writing, ADA was 2.54% lower at $0.3221, while its total market cap inched nearly 1% lower. Cardano ranks as the 7th largest cryptocurrency by market cap after XRP and above Polygon.
Cardano price has recorded a sharp decline for the past few days as Silvergate’s crisis continues to weigh on cryptocurrencies. Silvergate Capital is a Californian bank that pioneered money transactions between cryptocurrencies and hard cash. The Silvergate crisis looks to be the next big failure after the collapse of FTX and Terra’s LUNA meltdown.
Data by Coinmarketcap show that the global crypto market cap has continued to move lower to $1.01 trillion, pointing to a bearish outlook in the crypto market. Bitcoin’s dominance has also inched lower as the digital asset remains at the $22,000 level.
Fears of higher interest rates by the US Federal Reserve have been gnawing at the markets, following Powell’s hawkish tone. Fed chair Jerome Powell announced on Tuesday that the Federal Reserve is prepared to return to bigger interest rate hikes in a bid to fight inflation.
The US central bank has been struggling to cool the economy despite a year-long campaign of monetary tightening. Even so, at his congressional appearance on Tuesday, Powell warned of his willingness to impose further interest rate hikes to combat persistent price rises. The Fed chair announced that the ultimate level of interest rates could go higher than previously anticipated on the back of strong economic data.
In reaction to Powell’s statement, the yield on the 10-year Treasury inched lower to 3.972%, while the 2-year Treasury yield rose to 5.045%, its highest level since 2007. The dollar scaled multi-month highs against other currencies on Wednesday, following Powell’s statement. The dollar index is hovering above the crucial level of $104.00 at $105.674, its highest level since early January.
Cardano price has been hovering slightly above the crucial level of $0.300 for the past few days as markets digest Silvergate’s backing out. On the daily chart, the ADA price has formed a descending triangle (shown in yellow), which is a bearish indicator. The altcoin has fallen below the 25-day and 50-day moving averages, while its Relative Strength Index (RSI) slips to 33, slightly above the oversold region.
Therefore, it is likely that the Cardano price will continue falling in the short term, extending its bearish trajectory. If this happens, the next key support level to watch will be $0.300. However, a move past the major resistance level of $0.3540 will invalidate the bearish view.