TLDR
- Cardano (ADA) jumped 13% on Wednesday after Trump eased trade war concerns, now trading around $0.63
- ADA has recovered 23% from Monday lows of $0.50, but remains in an overall downtrend
- Technical analysis suggests potential downside to $0.40 region if ADA fails to hold key support at $0.581
- Broader crypto market sentiment remains bearish despite the recent bounce
- Possible Ripple and Cardano collaboration in the works, but impact remains uncertain
The price of Cardano (ADA) experienced a notable recovery on Wednesday, jumping 13% following US President Trump’s announcement of a partial pause on new tariffs. The cryptocurrency is now trading around $0.63, marking a 23% increase from Monday’s lows of $0.50.
President Trump announced a 90-day delay on implementing new tariffs for some countries. However, he simultaneously increased tariffs on Chinese imports to 125%, citing a “lack of respect that China has shown to the world’s markets.”
This easing of some trade war concerns provided the catalyst needed for traders to close out shorts and for dip buyers to return to the market.
The bounce comes after Cardano and other cryptocurrencies had become oversold earlier in the week, making the market ripe for a recovery.
Market participants are now questioning whether this relief rally signals a bottom for Cardano or if further downside is still likely.
Technical Outlook Remains Concerning
Despite the impressive Wednesday rally, technical indicators suggest caution. Cardano remains in an overall downtrend and trades substantially below all its major moving averages.
A technical analysis on the TradingView platform identifies $0.581 as a critical support level. Failure to hold this level could trigger further breakdown.
The next key support sits at $0.5092, but analysts don’t expect this level to provide significant strength if tested.
If these support zones are breached, Cardano could enter what one analyst terms a “zone of emptiness” where buying pressure might become non-existent.
Such a scenario could send ADA plummeting toward targets of $0.4564, $0.42, and potentially even $0.40.
Macro Factors Creating Headwinds
The broader economic environment continues to present challenges for risk assets like Cardano.
Inflation remains a concern, with the potential for further price pressures as tariff effects filter through the economy. This, combined with a robust labor market, has prevented the Federal Reserve from easing monetary policy to support markets.
CPI data expected later this week could further strengthen the case for the Fed to maintain current rates, disappointing investors who have priced in approximately 100 basis points of easing by year-end, according to the CME’s Fed Watch Tool.
CPI day tomorrow. Estimate is 2.8% but Truflation has us at 1.34%.
I would imagine that we'll beat expectations, and yet I'm not sure the Fed will be convinced that "they" have "beaten" "inflation" yet, due to the fact that the tariffs haven't priced themselves.
Gonna be… pic.twitter.com/LHfUqwf52y
— World War Bitcoin (@WWBitcoin) April 9, 2025
US treasury markets are sending concerning signals, with the 10-year yield having jumped 45 basis points from earlier weekly lows to around 4.30% as of early Thursday trading.
With US long-dated yields remaining above 4.0%, investors may be discouraged by the lack of downside in bond yields despite recent corrections in stock markets.
Potential Catalysts to Watch
While the technical and macro outlook appears challenging, there are potential developments that could impact Cardano’s price trajectory.
Reports suggest that Ripple and Cardano may be developing some form of collaboration. However, details remain scarce, and it’s unclear whether this partnership will yield positive results for either cryptocurrency.
The enthusiasm that Cardano would be a major beneficiary of the pro-crypto Trump administration hasn’t materialized into tangible outcomes yet.
Cardano hasn’t been selected as the blockchain to run Treasury payments. Additionally, Cardano co-founder Charles Hoskinson hasn’t secured a position in Trump’s inner circle of crypto advisors.
Nevertheless, the Cardano price still trades approximately twice as high as its pre-Trump election victory levels.
The crypto market recently experienced increased volatility due to conflicting reports about a supposed 90-day U.S. tariff suspension, which the White House later denied.
This market confusion pushed Bitcoin down to $74,620 and Cardano to $0.54, though both have since recovered somewhat.
Cardano’s recent bounce to the $0.5751 range lacks strong conviction based on volume patterns. The thin trading volume and absence of aggressive buying suggest this relief may be temporary.
Given the complicated backdrop for risk assets, both retail and institutional investors may remain hesitant to make substantial commitments to cryptocurrencies like Cardano in the near term.
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