Key moments

• Cardano’s price has once again fallen below $1, at one point reaching $0.81.
• This sudden price decrease followed a period of intense market activity propelled by an announcement made by U.S. President Donald Trump, who outlined plans to include ADA, alongside other major cryptocurrencies, in a strategic crypto reserve.
• The broader cryptocurrency market is also experiencing a period of consolidation, which is contributing to the downward pressure on Cardano’s price as traders take profits and speculative enthusiasm wanes.

Recent Surge in Cardano’s Price Proves Short-Lived

Cardano was among the cryptocurrencies that saw substantial growth following Donald Trump’s announcement of a potential crypto reserve, achieving a 50% increase. However, this surge has been abruptly countered by a substantial price correction. On Tuesday, Cardano’s price tumbled below the $1 mark. ADA now trades at approximately $0.82, with a low of around $0.81 having been observed during the downturn.

Despite the price drop, on-chain analysis reveals that investor interest in ADA remains strong. Over $110 million worth of ADA has been withdrawn from exchanges in the past 48 hours, indicating continued accumulation by large investors. Furthermore, significant purchases of ADA, totaling 420 million tokens, were observed following Trump’s announcement, suggesting a long-term bullish outlook among some market participants.

Technical indicators, however, paint a more cautious picture. The Relative Strength Index (RSI) indicates a downward trend, which means a decrease in buying pressure and a potential shift toward bearish momentum might be on the horizon. Additionally, ADA’s price is approaching a critical support level at $0.80. A failure to hold this support could lead to a further decline.

The broader cryptocurrency market has also experienced a period of consolidation, contributing to the downward pressure on ADA. The initial surge, driven by speculative enthusiasm, appears to have subsided, leading to a wave of profit-taking among traders.

Analysts remain divided on ADA’s future prospects. While some predict a further decline, citing weakening technical indicators, others maintain a bullish outlook, pointing to strong on-chain activity and the potential for increased institutional interest. The growing number of active daily addresses and the expansion of DeFi features on the Cardano platform also contribute to a sense of long-term optimism. Ultimately, ADA’s ability to recover from this downturn will depend on a combination of factors, including overall market sentiment, investor confidence, and the continued development of the Cardano ecosystem. The coming days and weeks will be crucial in determining ADA’s future trajectory.