A prominent cryptocurrency analyst has identified the potential downside price target for Cardano (ADA), a smart contract platform, if it experiences another correction. In a recent video update, Benjamin Cowen, a crypto strategist with 849,000 YouTube subscribers, stated that if the Federal Reserve does not reintroduce quantitative easing (QE), ADA could continue to decline.
Cowen also mentioned the possibility of ADA dropping even lower, particularly if it follows a similar pattern to the previous cycle. He suggested that if ADA were to decrease by 56%, it could reach a price below $0.60, which is where it previously fell to. There is also a chance that ADA could return to the $0.357 price level if Federal Reserve Chair Jerome Powell does not implement QE and encourages continued involvement in the cryptocurrency market.
Quantitative easing refers to the central bank of a government purchasing financial assets to increase the money supply and stimulate economic activity.
Cowen further discussed ADA’s technical indicators, including its 20-week simple moving average (SMA) and 21-week exponential moving average (EMA), which align with the possibility of another significant decline in the cryptocurrency.
He highlighted the importance of the bull market support band for ADA against Bitcoin. While ADA briefly dipped below this band in mid-2023, it had a weekly close near the 20-week SMA earlier this year. Cowen suggested keeping an eye on this band as well.
Currently, the 20-week SMA for ADA is approximately $0.56, while the 21-week EMA is around $0.67, which would correspond to a price of approximately $0.53.
At the time of writing, ADA is trading at $0.89, representing a 3% increase over the past day. On December 2nd, its value was $1.21.
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