Cardano’s ADA Drops 12% Amid Treasury Proposal and Geopolitical Tensions

Cardano’s native token, ADA, has faced significant challenges this week as two major events shook investor confidence. The first catalyst was a proposal by Cardano founder Charles Hoskinson to convert $100 million worth of ADA from the treasury into stablecoins and Bitcoin. This move, aimed at bolstering Cardano’s decentralized finance (DeFi) ecosystem, has sparked debate within the community regarding trust, decentralization, and long-term strategy. Critics argue that such a large conversion could undermine the stability and trust in the ADA token, while supporters see it as a strategic move to enhance the ecosystem's liquidity and utility.

The second factor contributing to ADA’s slide was the escalating geopolitical tensions between Israel and Iran. This conflict caused widespread panic in global markets, including the cryptocurrency space. The broader crypto market experienced sharp declines as fear and uncertainty dominated investor sentiment, and ADA was not immune to this market-wide sell-off.

As of the latest update, ADA is trading at $0.6349, with weak momentum. On the 2-hour chart, ADA is hovering just above the $0.6200 support zone, having dropped from highs near $0.72 earlier in the week. The 200 Exponential Moving Average (EMA), currently at $0.6867, remains a significant resistance level. ADA also failed to reclaim the $0.6500 zone, which now serves as immediate resistance. The Relative Strength Index (RSI) is near 36, indicating that the coin is still in bearish territory, though it is slightly recovering from oversold conditions.

Looking ahead, if the $0.6200 support level breaks, ADA could drop toward the $0.58–$0.60 range, especially if broader market volatility persists. This range could serve as a key capitulation zone where buyers may re-enter the market. Conversely, if ADA manages to hold above $0.6200 and break back above $0.6500, a short-term recovery toward $0.6867 (the 200 EMA) becomes more likely. However, the bearish trend remains dominant, and without an improvement in market-wide sentiment or a clear green light from the community on the treasury proposal, ADA may struggle to gain bullish traction. The community's response to the treasury proposal and the resolution of geopolitical tensions will be crucial in determining ADA’s future price movements.