Price Analysis of Cardano: Is ADA Price About to Drop by 50%?

Cardano (ADA) has fallen slightly on Monday, trading sideways in the $0.62 region, but is at a crucial technical junction, with price movements in the coming days potentially very important for the short term growth momentum of this cryptocurrency. ADA is currently probing its 21DMA after continually facing resistance at this line in recent weeks.

If it touches the resistance level at 21DMA once again, it will signal that the sellers are still in control of this market and that the price is likely to fall to a new low. Indeed, the risk of Cardano's price falling 50% back to the lowest level of 2024 at $0.30 is becoming increasingly likely. Here are the reasons. Macroeconomic instability continues to increase – Will Cardano price fall by 50%? The title about the trade war between the United States and the rest of the world still causes confusion as of Monday, April 21. When sentiment regarding the severity of the trade war fluctuates, the market will continue to experience short term volatility, and ADA is no exception. This means that traders should focus on the bigger macro picture. As many macro analysts emphasize, Trump's trade war seems to be an inadvertent attack on the USD as a global reserve asset.

The reason is that the continuous trade deficit of the United States with the rest of the world is a key feature of the global financial order with the USD at its center. In that context, the recent macro price fluctuations have many reasons – the DXY and USD-denominated assets such as US stocks and bonds have all faced significant selling pressure as international investors move money out of the US dollar.

Gold has been the largest winning asset to date, but the strong price movement in recent days suggests that Bitcoin may start to catch up as its story as a neutral reserve asset/safe haven continues to evolve. Does this mean that altcoins like Cardano could also explode soon? Yes, that is unlikely to happen. Behind the strong demand for gold ( and now Bitcoin ) is the instability of the global financial order, which is not a good environment for the riskiest assets, cryptocurrencies like Cardano. The US economy may soon fall into recession, and with the Fed intending to stay put due to concerns about rising inflation, it may not be a good time to buy Cardano. Indeed, if things get really bad, the price of Cardano could fall back to the lowest level of 2024 at $0.30.

Buy ADA Dip? But just because the medium-term outlook for Cardano's price is not very optimistic does not mean that long-term investors should not accumulate. Cardano is still one of the most promising layer 1 projects in the cryptocurrency industry. This blockchain has recently transitioned to complete decentralized governance and is set to become the leading Bitcoin DeFi sidechain by 2025. ADA is still more speculative compared to blockchains like Ethereum and Solana, which have achieved much higher levels of adoption. Indeed, a common criticism of Cardano is that it is a "ghost chain" – an accusation based on the level of on-chain activity being significantly lower than that of major competitors. According to DeFi Llama, Cardano has a TVL of about 300 million dollars compared to over 46 billion dollars on Ethereum. But with the latest market capitalization of around 22 billion dollars, compared to 72 billion dollars for Solana and 190 billion dollars for Ethereum, this cryptocurrency has a lot more potential for price appreciation if things go well. And everything going well is likely to happen in the coming years, when the macroeconomic instability in the short term disappears. This is because the Trump administration was very supportive of cryptocurrencies and intended to support the development of this industry through favorable policies. When macroeconomic uncertainties begin to fade and liquidity in the United States starts to flow back, the price of Cardano may experience a strong recovery. The price could even break the old record high of $3.0 in the coming years, increasing fivefold from the current level.