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Joel Frank
Author
Joel Frank
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The Cardano (ADA) price jumped an impressive 13% on Wednesday after US President Trump backed off somewhat from his trade war against the rest of the globe, facilitating a major rally in risk asset markets.
Last around $0.63, the Cardano price is up a stunning 23% from its Monday lows around $0.50.
The US President announced a 90-day pause on the implementation of new tariffs on some countries on Wednesday.
However, he increased tariffs on Chinese imports to 125% over the “lack of respect that China has shown to the world’s markets.”
With Cardano, other major cryptos and stock markets having become very oversold at lows earlier this week, the market was ripe for a bounce.
And Trump backing off from at least some of his tariff threats was just the catalyst traders needed to close out some shorts, and for dip buyers to flood back into the market.
Could this be the start of a new Cardano price rally back to its December highs in the $1.30 area?
Where Next for the Cardano Price – Back to All-time Highs?
The impressive Wednesday rally has some traders asking if the Cardano price might now have bottomed, and a return to late-2024 highs might be on the cards.
Well, an easing of trade war concerns and the fact that the market got so bearish and oversold earlier this week suggest that a local low is likely in.
A choppy continued recovery could well extend in the coming days, assuming no new trade war escalation headlines rock sentiment once again.
Of course, that’s no guarantee, as the trade war between the US and China continues to heat up, even if things are cooling off with other nations.
Macro could also throw spanners in the works. Still too hot inflation, which could rise further as tariff affects creep through, and a robust labor market are preventing the Fed from being able to ease to support falling markets and a slower economy.
CPI data out later this week could further highlight strengthen the case for the Fed to sit on its hands.
With money markets currently pricing 100bps of easing by the year’s end, per the CME’s Fed Watch Tool, there is a risk that hot inflation data disappoints the market and risk appetite is hurt.
And US treasury markets continue to send disturbing signals, with the US 10-year yield having jumped 45bps from earlier weekly lows to around 4.30% as of early Thursday overnight trade.
With US long-dated yields still well above 4.0%, investors will be disappointed by the lack of downside in US bond yields despite the meaningful correction in US stock markets in recent weeks.
All said, it remains a complicated backdrop for risk assets. Investors, retail or institutional, are unlikely to feel confident enough to pile back into crypto’s like Cardano anytime soon.
Cardano Back to $0.30?
Bearish technicals and a lack of any notable Cardano specific narratives further increase the risk of further price downside in the near-future.
Cardano has seen a decent bounce from recent weekly lows, but remains in an overall downtrend, and remains substantially below all of its major moving averages.
Meanwhile, all of the hype that Cardano would somehow be one of the major beneficiaries of the arrival of a pro-crypto Trump administration hasn’t come to anything yet.
Cardano hasn’t been selected as the blockchain to run Treasury payments on top of. Cardano co-founder Charles Hoskinson didn’t make it into Trump’s inner circle of crypto advisors.
Yet the Cardano price still remains around 2x above its pre-Trump election victory levels.
A worsening backdrop in the months ahead coupled with a continued deflation of retail hype, suggests the Cardano price could continue to ebb lower back to its mid-2024 range in the $0.20s-40s.
One theme to watch: Ripple and Cardano appear to be cooking up some sort of collaboration. It remains to be seen whether this will yield any bullish results for either crypto.
