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Cardano faces market volatility with major updates and fears from the decisions of the US Federal Reserve. Here are the latest developments:
The community approves a $71 million development fund (August 4, 2025) – the largest financial allocation in the project's history for developing the core protocol.
ADA drops 8% amid a sell-off in the cryptocurrency market (August 20, 2025) – the worst performer among the top 10 coins due to fears from the Federal Reserve's decisions.
The "golden cross" pattern raises expectations for the price to reach $10 (August 20, 2025) – a technical pattern reminiscent of the 2021 rise, though strong resistances may hinder the ascent.
Detailed Analysis
1. The community approves a $71 million development fund (August 4, 2025)
Overview:
The Cardano community approved the allocation of 96 million ADA (equivalent to $71 million) for updates to the core protocol through the first direct vote on the network, with an approval rate of 74%. These funds will be used to support improvements in Hydra technology to expand the network, updates to the Ouroboros Leios consensus mechanism, and the Acropolis project aimed at enhancing node structure. Funds are disbursed based on achieving specific milestones, with monthly progress reports from Input Output Global (IOG).
What does this mean?
This is positive news for ADA as it enhances network capabilities and supports decentralized governance. However, there are still risks in execution, as delays may negatively impact investor confidence.
2. ADA drops 8% amid a sell-off in the cryptocurrency market (August 20, 2025)
Overview:
ADA's price fell to $0.84, down more than Bitcoin (-3.2%) and Ethereum (-5.3%), following higher-than-expected US inflation data that diminished expectations for interest rate cuts by the Federal Reserve. This coincided with an outflow of $523 million from Bitcoin exchange-traded funds and $422 million from Ethereum funds, reflecting caution from financial institutions.
What does this mean?
This reflects ADA's exposure to general economic risks. The Relative Strength Index (RSI) at 44 approaches the oversold territory, and if the selling pressure continues, the price may test its August low of $0.68 if the $0.84 support is broken.
3. The "golden cross" pattern raises expectations for the price to reach $10 (August 20, 2025)
Overview:
The "golden cross" pattern occurring when the 50-day exponential moving average crosses above the 200-day exponential moving average recalls ADA's 236% rise in 2021. Analysts point to a triangular accumulation pattern, with resistance at $0.98 that needs to be surpassed. However, there are doubts due to strong resistance at $2.90 from the 2021 cycle.
What does this mean?
Despite positive signals, ADA needs to surpass $1.10 to confirm a long-term bullish trend. Reaching the $10 target requires a tenfold growth, which depends on widespread adoption and currently absent institutional inflows.
Summary
Cardano balances ambitious updates with significant economic challenges. The $71 million development fund reflects strong governance, but Federal Reserve policies and technical resistances near the $1.00 level pose challenges. Will the "golden cross" pattern succeed in facing declining inflows into cryptocurrency funds?
