Cardano Faces Resistance at $0.63, Risk of Drop to $0.51

Cardano (ADA) is currently facing a critical juncture as it battles with key short-term resistance levels around $0.63. The cryptocurrency's price action has been lackluster in recent days, but it has managed to snap a short-term downtrend earlier this month. This suggests that the bulls are making progress in regaining momentum, even though the price has found resistance above the prior downtrend resistance line.

If the Cardano price is unable to break back above its 21-day moving average (21DMA), there is a strong likelihood of a near-term drop back to recent lows around $0.51. However, if the bulls can regain momentum and push ADA back to $0.67 per token, it could open the door to a recovery to resistance in the $0.80 area.

Amid the current choppy market conditions, predicting the next move for the Cardano price is challenging. Trade war fears continue to dominate sentiment across financial markets, and the economic damage caused by trade uncertainty could become an increasing headwind deeper into 2025. Fed chair Jerome Powell highlighted growing risks of “stagflation,” an economic situation defined by high inflation but slow or negative economic growth. His comments were deemed as “hawkish” by some, signaling a reluctance to ease monetary policy to prop up the economy amid fears of sticky inflation.

Against this macro backdrop, crypto traders should not expect any major near-term market rebounds. Any near-term market rebounds, if they aren’t backed by a substantial easing of macro uncertainties, should be looked upon with suspicion. Rumors of an upcoming partnership between Cardano and Ripple Labs, the creator of the XRP Ledger, could trigger some near-term upside volatility for Cardano. However, a new altcoin season is unlikely to materialize until a flood of new central bank liquidity arrives, which remains some way off.

The Cardano price could well dip to fresh multi-month lows in the coming weeks and months. Would it be worth buying the dip? Cardano remains a highly speculative cryptocurrency that has struggled to garner much real adoption since its launch nearly a decade ago. This is demonstrated by its low total value locked (TVL) and low blockchain activity. However, Cardano has one of the strongest and most dedicated communities of any crypto. In the wake of the arrival of the pro-crypto administration in the White House in January, it has been at the forefront of a lot of conversations, even getting a mention from the President himself.

Cardano is also plotting to become the go-to Bitcoin DeFi chain, which could be a major boon for its usage. If Cardano does enjoy accelerated adoption over the next four years of the administration’s term, few should be surprised to see it 10x from current levels to hit new record highs. That said, it remains a riskier bet compared to better-established cryptos like Bitcoin and Ethereum, which arguably have just as much upside potential.