The ADA price crawled back on Tuesday as market fears about China Evergrande’s contagion risks eased. Cardano rose to $2.1300, which was about 8.25% above the lowest level on Monday. This rebound brings its total market value to more than $67 billion, making it the fourth-biggest coin in the world after Bitcoin, Ethereum, and Tether.
Fear and Greed index
The rebound of Cardano coincides with a relatively bullish rebound of global equities. Most indices and their futures rose on Tuesday, with the DAX, FTSE 100, and CAC 40 indices rising by more than 1%. Similarly, the Dow Jones, S&P 500, and Nasdaq 100 indices rose by more than 1%.
This performance is driven by the realization that Evergrande’s collapse will have a minimal impact on western companies. The major firms that are exposed to these risks are companies like Blackrock and Ashmore Group. In general, most companies that will be impacted are from mainland China, where the government has put tough measures for foreigners to invest.
Meanwhile, the main fear and greed index is still in the extreme zone of 21, meaning that investors are incredibly fearful about the market. The crypto fear and greed index is still at 27. In most periods, investors tend to buy assets when the fear and greed index moves to the extreme fear zone.
The ADA price is also under pressure as investors wait for the upcoming Federal Reserve decision. This is an important decision because the bank will provide more signals about when it will start tapering its asset purchases.
Still, a buy the rumour, sell the news situation is happening in Cardano as investors sell the recent Alonzo hard fork. In the past, we have seen these situations several times such as when Bitcoin declined after Coinbase went public.
ADA price prediction
The daily chart shows that the Cardano price has been in a major sell-off recently. It has declined by more than 30% from its all-time high, meaning that it is in a bear zone. Along the way, it has crashed below the 25-day and 50-day moving averages and below the 38.2% Fibonacci retracement level.
Therefore, despite the jump, the coin remains in a bearish trend, with the next key level to watch being the 61.8% retracement level at $1.8050. This means that the current relief rally is a dead cat bounce.
