Why did Cardano (ADA) drop today?

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Today, the price of Cardano (ADA) has declined, closely related to multiple macroeconomic factors and the overall downturn of the cryptocurrency market. Here are some key factors:

The Federal Reserve's hawkish stance

After announcing a 25 basis point interest rate cut, the Federal Reserve released a more aggressive stance, suggesting a possible slowdown in rate cuts. This news affected the sentiment of investors in risk assets, leading to widespread sell-offs in the market, particularly in the cryptocurrency sector. Federal Reserve Chairman Jerome Powell's statements changed market expectations for future monetary policy, thereby suppressing the prices of major cryptocurrencies like Bitcoin and Ethereum, which further impacted other risk assets like Cardano.

Bitcoin's price fell below $100,000, while Ethereum (ETH) dropped from around $4,000 to about $3,400, a decline of over 16%.

Cardano's ADA price also did not escape this fate, falling approximately 3% in the past 24 hours, from $0.896 to $0.869.

Strengthening dollar and rising bond yields

Against the backdrop of rising U.S. Treasury yields, the dollar has rebounded strongly, leading to a decrease in the appeal of risk assets. Investors are more inclined to hold assets with more stable returns, abandoning investments in high-risk cryptocurrencies. As the dollar strengthens, the demand for cryptocurrencies like Cardano ADA is suppressed, leading to a price decline.

Increased uncertainty in the cryptocurrency market

The Federal Reserve's policy statement and the strength of the dollar have intensified market uncertainty, resulting in a general decline in cryptocurrencies and other risk assets. During the holidays, reduced liquidity further exacerbated market volatility, weakening buying pressure in the cryptocurrency market and further intensifying the price decline.

Whale activity in Cardano

Despite the drop in Cardano's price, whales have shown certain accumulation behavior during this process. According to cryptocurrency analyst Ali Martinez, whales have accumulated over 20 million ADA in the past 48 hours. This phenomenon may be related to the following points:

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