Cardano forms a bullish reversal pattern. The Federal Reserve may signal the end of its tightening cycle.
Cardano forms a higher reversal pattern that could signal the end of the Federal Reserve's tightening cycle, with a move above $0.35 bringing further strength.
Next week is important for the US dollar as the US Federal Reserve announces its interest rate decision on Wednesday. The market unanimously expects the Fed to keep interest rates at the same level as six weeks ago, the second pause in the current tightening cycle.
However, the focus is not on the actual decision. Instead, what comes next will depend on what the federation suggests.
More precisely, is the tightening cycle over? Could the Fed declare a fight against inflation?
Indeed, inflation has come down from high levels. In addition, it continues to fall.
If one can draw a parallel with Europe, the Fed should be prepared to cut inflation even further. In Europe, prices of goods and services fell sharply in October. Given that the Fed and the ECB have had similar tightening cycles, one might expect similar inflation rates.
The dovish Fed will trigger weakness in the US dollar and some markets have already sniffed it. The cryptocurrency market is one example, Bitcoin recently raised around $35k, triggering similar movements in other cryptocurrencies such as Cardano.
ADA/USD broke out of horizontal support – how much can it rally?
One of the cryptocurrencies the dovish Fed is expecting is Cardano. ADA/USD has rallied from horizontal support and is trying to break dynamic resistance.
Cardano Chart by TradingView
Cardano has been in sync with other cryptocurrencies at the beginning of the trading year but has not been able to sustain its gains. However, it found strong support at $0.25, then broke out of the lows.
The market formed a high reversal pattern that could represent the end of the bear market. A move above $0.35 should trigger further strength, while a break below the 2023 lows would undermine the bullish reversal pattern.
