Cardano Price Slumps Under $1 – Time to Buy the Dip?

The Cardano (ADA) price has slumped back below $1.0 as cryptocurrency markets take a beating amid concerns about an ominous rise in long-term US government bond yields.

US economic data on Thursday sparked concerns that a US labor market rebound might spark a renewed inflation surge, preventing the Fed from cutting rates much further.

Yields spike after somewhat hot US economic data w/US 10y now at 4.67%: ISM Prices Paid Index came in higher than expected, signaling potential future inflation. At the same time, JOLTS job openings unexpectedly increased, w/previous month's data also revised upward. pic.twitter.com/Fdqy8M0UlV

— Holger Zschaepitz (@Schuldensuehner) January 7, 2025

While the CME’s Fed Watch Tool shows that interest rate futures markets are still pricing a more than 50% chance that the Fed cuts interest rates by 50 bps this year, which is keeping US 2-year bond yields anchored below 4.3%, the 10-year yield is probing its highest levels in nearly a year around 4.7%.

Risk assets markets are thus nervous, with highly risk-sensitive altcoins like Cardano taking the brunt of the market’s concern.

The Cardano’s strong performance in the first days of 2025, which resulted in an important near-term technical breakout, had some expecting a near-term pump back to December highs in the $1.30 area.

But the latest market dip, which has seen the Cardano price slump to around $0.96 from earlier as high as $1.14 area, has muddied the picture.

So, what is next for the Cardano price?

Cardano Price Analysis – Where Next for ADA?

The Cardano chart paints a neutral picture relating to ADA’s near-term price outlook. Currently nestled between its 50DMA at $1.0148 and its 21DMA at $0.94, ADA is also around the mid-point of its recent $0.75-$1.30 range.

Moreover, its 14-day Relative Strength Index (RSI) is around 50, suggesting near-term market conditions aren’t at all over-bought or over-sold – a reading below 30 indicates an over-sold market, while a reading above 70 indicates an over-bought market.

The indecisive tone to ADA trade shouldn’t come as too much of a surprise given the fundamental backdrop.

The Cardano price, along with most other major cryptos, saw a massive run-up in wake of incoming pro-crypto President Trump’s November election victory.

With macro headwinds building since the Fed’s hawkish mid-December meeting and traders now in wait-and-see mode ahead of Trump’s arrival in office in 12 days, profit-taking and a pullback from highs makes sense.

So, should traders buy this dip?

Time to Buy the ADA Dip?

Any investors in ADA right now need to be prepared to HODL through near-term adversity.

The current sell off could well extend should Friday’s official jobs report result in further macro risk off trading conditions.

Its very possible that cryptocurrency markets remain on the defensive ahead of Trump’s inauguration.

The price action beyond the 20th depends on whether the Trump administration quickly lives up to the cryptocurrency market’s hopes.

Will they establish, or indicate an intent to establish a BTC reserve? Will Trump quickly sign other executive orders to undo the damage done to the industry by the anti-crypto Biden administration?

Will the incoming SEC chairman Paul Atkins immediately put a stop to the agency’s war against the US crypto industry?

Paul Atkins' extensive experience in financial regulation will be critical to reversing the harm @SECGov Chair Gary Gensler has done to our capital markets and U.S. economy.

I look forward to working with my colleagues to quickly consider his nomination @BankingGOP. pic.twitter.com/jNtnpJAwhX

— Tim Scott (@SenatorTimScott) January 7, 2025

Assuming the answer to all of these questions is yes, 2025 could be a very good year for altcoins.

Bitcoin is currently in its final and most explosive year of its four year cycle, which is also historically when altcoin season has arrived.

That doesn’t guarantee an alt-coin season similar to 2021 is coming in 2025 – back then interest rates were at zero and the Fed was pumping markets with QE whilst the US government was handing out stimulus cheques.

Macro is way less of a tailwind this time around. But 2025 could be crypto’s best-ever year in terms of adoption.

As a leading altcoin and household name in the crypto space, the Cardano price is primed to perform very well.

That’s especially true if Cardano founder Charles Hoskinson lands a crypto advisory role in the White House, as has been hinted, and the pivot to becoming a Bitcoin DeFi layer in May goes well.

BREAKING NEWS:

BITCOIN IS COMING TO CARDANO MAY 2025 – CHARLES

"We're going to get Bitcoin on cardano at most likely may 2025"

Are you not excited? pic.twitter.com/i0SxJdpMhp

— Mintern (@MinswapIntern) December 19, 2024