Cardano Likely to Slump to $0.40s – Buy the Dip?

Cardano (ADA) bulls are desperately attempting to hold onto the key 200DMA level on Friday at the end of what has been a rough week for risk assets.

The Cardano price was last around $0.63, hovering just below the 200DMA at $0.66, with the price having come close to testing early February lows at $0.55 earlier in the session.

It’s been a rough week for risk assets, with trade war fears rocking the market and money flowing into “safe” assets like USD and US bonds on growing worries about US economic weakness.

And that hit crypto markets particularly hard, sending Bitcoin (BTC) tumbling at one point back below $80,000 and Cardano for from around $0.80 to its current levels.

But the crypto hasn’t convincingly broken below its 200DMA just yet, giving the bulls hope that a rebound could soon come.

The recent sell-off plus improvement in global liquidity conditions suggests risks are titling towards a crypto market rebound in the weeks ahead from here.

However, ADA remains stuck in a downtrend until proven otherwise. And if the coming months are going to mirror mid-2024, just as recent months mirrored late-2023/early 2024, then Cardano could be about to lose its grip on its 200DMA for quite a while.

Assuming the broader crypto bull market is on pause right now amid elevated economic uncertainties, and until fresh catalysts arrive, it would be no surprise to see ADA decline all the way back to the $0.40s.

However, rather than this marking the start of a new long bear market, the longer-term outlook for ADA continues to look good. Here’s why.

Cardano’s Long-Term Outlook Remains Strong – Here’s Why

Macro and broader market conditions could easily weigh on ADA in the coming months.

However, in the background, a lot of bullish things are occurring in the US that could set up the crypto industry and markets for many good years ahead.

Firstly, the SEC, under its new leadership, has reversed its war against the crypto industry, notably dropping its claim that Cardano is a security.

The SEC no longer claims that ADA is a security. pic.twitter.com/vmFdMBegWs

— Cardano YOD₳ (@JaromirTesar) February 28, 2025

The crypto ecosystem is now free to grow in the US without the constant fear of SEC attack, and this should benefit all major layer-1 chains in the long run, Cardano included.

There also remains an outside chance that Cardano is included in some sort of future US digital assets stockpile.

And even if it isn’t, and the stockpile only includes Bitcoin, that would still lift the entire crypto market. This could be a major theme later in 2024.

Cardano may also be one of a few major altcoins to secure a spot ETF in the USA this year, alongside potentially the likes of Litecoin, Solana, XRP and Dogecoin.

But perhaps the biggest wild card for Cardano in 2025 is the possibility that the US treasury picks it as a the public blockchain to run government transactions on.

Cardano is an ideal candidate for improving the efficiency of the US government. For this use case, 100% uptime and high decentralization are essential. pic.twitter.com/UYs1pQHxmI

— Cardano YOD₳ (@JaromirTesar) February 15, 2025

This is pure speculation right now. But there might be some legs to these rumors, with Cardano founder Charles Hoskinson teasing earlier this month about an important upcoming meeting with a VIP in the White House.

Charles Hoskinson to meet with Elon Musk and David Sacks? 👀 pic.twitter.com/bSpbTsv5Ow

— TapTools (@TapTools) February 10, 2025

Per reports on X, the meeting could be set to occur on March 1st.

Charles Hoskinson to meet with a “Special Person” tomorrow? (March 1st) pic.twitter.com/pkVeA43f8U

— Investing Broz (@InvestingBroz) February 28, 2025

Of course, its highly unlikely that the US government ends up adopting Cardano as its public ledger for transactions.

But if this story gains any traction, ADA’s recent bearish run could be about to end abruptly.