Cardano Rebound 11% After 40% Drop, Macro Concerns Persist

Cardano (ADA) has been experiencing a tumultuous period, with its price recently rebounding after a significant decline. The cryptocurrency is currently trading around $0.7250, marking an 11% increase from its earlier lows of $0.65. However, this rebound is modest compared to the 40% drop from its highs just nine days prior, when President Trump announced a crypto reserve including ADA via a tweet on X.

Despite the initial excitement, Cardano's inclusion in the national US crypto stockpile has not translated into substantial gains. Unlike the strategic Bitcoin reserve, there are no current plans to expand the Cardano stockpile through additional purchases. Furthermore, the absence of Cardano's co-founder, Charles Hoskinson, from the White House summit on crypto has dampened investor enthusiasm. This snub has left ADA investors disappointed, as they had hoped for more bullish outcomes, such as Cardano being included in the strategic reserve and Hoskinson gaining influence as a crypto advisor.

The broader macroeconomic backdrop is also casting a shadow over Cardano's prospects. Rising concerns about the Trump administration's policies, which are expected to create short-term economic pain, have eroded risk appetite. US stocks have slid from their yearly peaks, and this trend is likely to continue as the economy faces further challenges. This macroeconomic uncertainty poses a significant risk to cryptocurrencies like Cardano, which are highly sensitive to market sentiment.

Technically, the Cardano price is testing its 200-day moving average (200DMA) for the third time in just over a month. A convincing breakout to the downside could lead to a cascade below the February lows, potentially opening the door to a prolonged move lower back to the late-2024 range of $0.27-$0.41. This scenario would mark a drop of up to 50% from current levels.

However, a drop to these depressed levels could present a compelling risk-reward opportunity for long-term investors. The current macro pain is likely to be temporary, and once conditions improve, the crypto market could experience a significant rally. The narratives behind the industry, including accelerating global adoption and a friendly regulatory environment in the USA, remain bullish. Cardano could potentially 10x from its lows in the $0.40 area back to