The Cardano (ADA) price is currently testing a key support level and its reaction in the days ahead could have a huge impact on ADA’s medium-term direction.
Last just above $0.70, the Cardano price is currently flirting with its 200DMA. In recent weeks, this was a strong area of support for ADA.
However, in markets, when a key level is being tested, the third time is often the charm. If Cardano does break convincingly below its 200DMA and, let’s say, also below its February lows, that could signal that a medium-term bearish trend has begun.
But do the fundamentals justify a near-term bearish trend? Yes, here’s why they likely do.
Cardano Price Set to Decline – Here’s Why
Risk appetite in broader financial markets has taken a beating over the past few weeks, with US equity markets tumbling as investors price in rising recession risk in the US.
The Trump administration has signaled that they are willing to allow a slowdown in the US economy as they pursue disruptive but, in their view, much needed economic policy shifts – namely a reduction in US government spending with D.O.G.E. and trade wars to re-industrialize the US economy.
With risks still very much tilted toward a slowdown in the US economy in the weeks and months ahead, it’s a complicated environment for risk assets, including major cryptos like Cardano.
Of course, crypto has bullish narratives like the US strategic Bitcoin reserve and the ongoing pro-crypto regulatory shift.
The Cardano price got a massive boost in early March after US President Trump tweeted that he planned to include Cardano in the reserve.
But this didn’t come to pass. The US government didn’t include any cryptos other than Bitcoin in the strategic reserve, and ADA didn’t even make it into the stockpile.
That’s not necessarily a snub to Cardano, rather its because the stockpile is just made up of crypto confiscated by law enforcement.
But still, with regards to ADA, it seems Trump was just all talk and its no surprise the Cardano price has slipped all the way back to $0.70 after nearly hitting $0.70.
Other Cardano hype talking points like 1) Charles Hoskinson getting into Trump’s inner circle of crypto advisors and 2) Cardano maybe being chosen by the D.O.G.E as a payment rails for the US treasury, have also lost a lot of traction.
Cardano founder Charles Hoskinson didn’t even get an invite to the White House crypto summit earlier this month.
In light of all of this, more downside for the Cardano price seems very likely right now, with plenty of the post-Trump election victory upside still yet to be given up.
How Low Can Cardano Go?
A break below the 200DMA and February lows could open the door to a slow bleed for the Cardano price all the way back to mid-2024 levels in the $0.30-40 area.
That’s assuming macro remains a major headwind and no massively bullish new Cardano theme springs out of nowhere – this is unlikely but in crypto, anything can happen!
Would Cardano then be a good crypto to accumulate at these levels?
Well, against the backdrop of the Trump administration and US Congress’ push to grow the crypto industry in the years ahead, most major cryptos are likely to do very well over the long-term.
That means any chance to get Cardano at a discount might be a good idea. That said, Cardano continues to lag well behind many of its major rivals like Ethereum and Solana in terms of real-world adoption.
Unless it experiences a boom in on-chain usage, its likely to continue losing ground versus other major cryptos experiencing faster on-chain growth.
Cardano could be a good crypto to buy on the dip in the coming months. But Bitcoin, Ethereum and Solana might all be better candidates.
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