Cardano Price Examining Critical Support Level – Is a Significant Decline Ahead?

The current value of Cardano (ADA) is testing a significant support level, and its reaction in the upcoming days could greatly influence ADA’s medium-term trajectory.

Trading just above $0.70, the Cardano price is currently interacting with its 200-day moving average (200DMA). Recently, this has been a strong support zone for ADA.

However, in market dynamics, when a critical level is tested, the third attempt often proves decisive. Should Cardano break convincingly below its 200DMA and, for instance, also dip beneath its February lows, it could indicate the onset of a medium-term bearish trend.

But do the fundamentals support 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 diminished over the past few weeks, with US equity markets declining as investors factor in increasing recession risks in the US.

The Trump administration has indicated a willingness to accept a slowdown in the US economy while pursuing disruptive yet, in their view, necessary economic policy changes—particularly a reduction in US government spending alongside D.O.G.E. and trade wars aimed at re-industrializing the US economy.

Summarizing this, here’s what Trump aims for:
1. Lower inflation
2. Reduced oil prices (for #1)
3. Decreased interest rates
4. Less deficit spending
5. Reduced US trade deficit
6. Decreased government inefficiency
All of these could be achieved by, or are a consequence of, economic weakness.

— The Kobeissi Letter (@KobeissiLetter) March 13, 2025

With risks still heavily weighted towards a slowdown in the US economy in the coming weeks and months, the environment for risk assets, including major cryptocurrencies like Cardano, is complex.

Of course, the crypto sector has optimistic narratives such as the US strategic Bitcoin reserve and the ongoing pro-crypto regulatory shift.

The Cardano price received a significant boost in early March after US President Trump tweeted intentions to include Cardano in the reserve.

However, this did not materialize. The US government did not incorporate any cryptocurrencies other than Bitcoin into the strategic reserve, and ADA was not included in the stockpile.

The U.S. government’s digital asset stockpile is 98% #Bitcoin. The remainder? Just noise. pic.twitter.com/fLLI9scl7g

— TFTC (@TFTC21) January 24, 2025

This is not necessarily a slight against Cardano; rather, it reflects that the stockpile consists solely of cryptocurrencies seized by law enforcement.

Nevertheless, regarding ADA, it appears Trump was merely making statements, and it is not surprising that the Cardano price has retraced back to $0.70 after nearly reaching that level.

Other points of excitement surrounding Cardano, such as 1) Charles Hoskinson joining Trump’s inner circle of crypto advisors and 2) Cardano potentially being selected by the D.O.G.E. as a payment rail for the US treasury, have also lost considerable momentum.

Cardano founder Charles Hoskinson did not receive an invitation to the White House crypto summit earlier this month.

JUST IN: #Cardano $ADA Founder Charles Hoskinson states “here are the facts: many of my people know individuals on the (White House) side. We didn’t get an invite. I’m going to assume I’ve not been invited to the White House. I don’t expect much policy work will be done.” pic.twitter.com/EVEZNltQ2y

— Angry Crypto Show (@angrycryptoshow) March 6, 2025

In light of all this, further downside for the Cardano price appears quite likely at this moment, with much of the post-Trump election victory gains still yet to be relinquished.

How Low Can Cardano Go?

A drop below the 200DMA and February lows could pave the way for a gradual decline in the Cardano price back to mid-2024 levels in the $0.30-40 range.

This assumes that macroeconomic conditions remain a significant headwind and that no unexpectedly bullish new Cardano developments emerge—though this is unlikely, anything can happen in crypto!

Would Cardano then be a favorable cryptocurrency to accumulate at these levels?

Well, against the backdrop of the Trump administration and US Congress’s efforts to expand the crypto industry in the coming years, most major cryptocurrencies are likely to perform well over the long term.

This suggests that any opportunity to acquire Cardano at a discount might be wise. However, Cardano continues to lag significantly behind many of its leading competitors like Ethereum and Solana in terms of real-world adoption.

Unless it experiences a surge in on-chain activity, it is likely to continue losing ground compared to other major cryptocurrencies that are seeing faster on-chain growth.

Cardano could indeed be a good cryptocurrency to buy on the dip in the coming months. However, Bitcoin, Ethereum, and Solana might all be more attractive options.

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