Cardano (ADA) Surges 13% on Trump's Tariff Pause, but Faces Bearish Technicals

Cardano (ADA) experienced a significant price surge midweek, rising 13% on Wednesday following the announcement by US President Trump of a 90-day pause on implementing new tariffs on certain countries. This development provided temporary relief for risk assets that had been under pressure. The cryptocurrency is currently trading around $0.57-0.63, marking a 23% increase from its Monday lows of approximately $0.50.

Despite the partial easing of trade war concerns, President Trump increased tariffs on Chinese imports to 125%, citing a “lack of respect that China has shown to the world’s markets.” This mixed policy approach has created volatility across crypto markets, with ADA responding positively to the temporary relief from trade tensions. The bounce may be attributed to oversold conditions earlier in the week, creating a favorable environment for short-covering and dip-buying activity.

Technical indicators, however, paint a concerning picture for Cardano’s near-term prospects. A Death Cross formation has appeared on ADA’s chart, with the 200-day exponential moving average (EMA) crossing above the 50-day EMA. This crossover typically signals the end of bullish momentum and often precedes further price declines. The bearish cross marks the end of Cardano’s five-month bullish momentum, suggesting a shift in market sentiment toward a more cautious outlook. Adding to these concerns, Cardano remains in an overall downtrend and continues to trade below all of its major moving averages. The four-hour candlestick chart reveals a pattern of lower highs and increasingly weaker bounces since late March, reinforcing the bearish outlook.

Market data indicates a concerning trend in investor sentiment toward Cardano. The MVRV (Market Value to Realized Value) Long/Short Difference has dipped below the neutral line, suggesting that long-term holders are approaching loss territory. This metric is particularly important as it shows the potential for profit-taking or loss-cutting decisions from investors who have held ADA for extended periods. If this trend continues, long-term holder profitability could shift to short-term traders, further intensifying selling pressure on the asset. The current lack of aggressive buying despite the recent bounce suggests limited conviction in a sustained recovery.

Cardano is currently holding above critical support at $0.54, but market analysts warn this might not last. A key trigger level has been identified at $0.581, with a breakdown below potentially opening the door to further losses. If support at $0.50 fails to hold, technical analysts suggest ADA could enter what one describes as a “zone of emptiness” where buying pressure becomes minimal. In this scenario, further price targets include $0.46, $0.42, and potentially even $0.40, representing significant downside from current levels. The $0.63 area, which previously served as support, is now functioning as resistance, coinciding with the 0.5 Fibonacci retracement zone.

The broader market environment continues to present challenges for risk assets like Cardano. Upcoming inflation data could impact Federal Reserve policy expectations, with markets currently pricing in 100 basis points of easing by year-end. Hot inflation reports could disappoint market expectations and hurt risk appetite across cryptocurrencies and other speculative assets. US Treasury markets send concerning signals, with the 10-year yield having jumped 45 basis points from earlier weekly lows to around 4.30%. With US long-dated yields remaining above 4.0%, investors may be discouraged by the lack of downside in bond yields despite recent stock market corrections. The continued US-China trade tensions create additional uncertainty, even as relations with other nations show signs of improvement. These complex macro factors make it difficult for investors to confidently re-enter positions in cryptocurrencies like Cardano in the near term.

Despite the bearish outlook, there are potential developments that could impact Cardano’s trajectory. Reports suggest Ripple and Cardano may be developing some form of collaboration, though the details and potential market impact remain unclear. For any meaningful recovery, ADA would need to secure $0.57 as a support floor and successfully break above the $0.63 resistance level. A shift in broader market sentiment or positive developments specific to Cardano could help avoid further losses and provide a path to recovery. However, the initial excitement that Cardano might benefit from a pro-crypto Trump administration hasn’t materialized in any concrete way so far. Cardano hasn’t been selected as the blockchain to run Treasury payments, and co-founder Charles Hoskinson hasn’t joined Trump’s inner circle of crypto advisors. Yet the price remains approximately double its pre-election levels, suggesting some premium might still need to deflate.