The Cardano (ADA) price is eyeing a possible drop below $0.52 as short-term price predictions turn bearish, but long-term bulls are nonetheless asking whether now is time to buy the dip.
Nearly all cryptocurrencies in the top 20 by market capitalization are trading with losses on Wednesday.
The Cardano price was last at $0.0525, down nearly 2% on the session.
ADA rejected a retest of its 50DMA at $0.55 on Tuesday.
While the Cardano price is still around 13% up versus last week’s lows, its over 20% down from December highs.
Market sentiment is fragile as traders continue to fret about the potential continuation of a “sell-the-fact” reaction to last week’s spot Bitcoin ETF approvals in the USA, and also as the macro backdrop turns into a minor headwind.
Short-term Macro Headwinds?
The US Dollar Index (DXY) and US bond yields have been pushing higher this year, generally a negative for crypto.
Recently released US data (inflation and retail sales) showed the US economy ended 2023 on a hotter-than-expected note.
And that is pushing back against bets that the Fed will cut interest rates as soon as March.
As per the CME’s Fed Watch Tool, money market implied odds of a 25 bps rate cut from the Fed in March were last around 55.7%, down from around 65% one week ago.
Multiple Fed policymakers have noted that March is probably too early for a rate cut.
Citigroup sees a first Fed rate cut in June.
Macro risks thus seem tilted towards a continued pricing out of a March rate cut.
That could continue supporting the US dollar, US yields and weighing on crypto in the short term.
Cardano (ADA) Price Prediction – Time to Buy the Dip?
Macro headwinds suggest risk of more downside for the Cardano price in the near term.
And chart analysis very much conforms to this view.
The Cardano price broke its mid to late-December uptrend in 2024 and has since confirmed a bearish trend by rejecting a retest of this uptrend last week.
Cardano (ADA) Price Chart / Source: TradingView
Since that failed retest, the Cardano price has slid below both its 21 and 50DMAs.
This fading momentum suggests a strong likelihood of a near-term retest of 2024 lows.
The $0.46 area is a strong zone of support for the Cardano price.
If the price does retest this zone, this might be the optimal time to buy the dip.
Cardano (ADA) Price Chart / Source: TradingView
Altcoin to Consider – Bitcoin ETF Token ($BTCETF)
While the Cardano price could dip in the near term, its long-term potential is strong.
But a newly launched altcoin called Bitcoin ETF Token ($BTCETF) could perform even better in 2024.
The altcoin is designed to offer traders upside exposure to when various milestones related to the launch of spot Bitcoin ETFs are hit via tweaks to its transaction tax and via a burn mechanism.
The next two relevant milestones include spot Bitcoin ETF assets under management exceeding $1 billion and the Bitcoin price closing above $100,000.
BTCETF backers tout it as an asymmetric opportunity. They believe SEC approval could easily spur a doubling or tripling of Bitcoin prices in 2024.
Meanwhile, BTCETF theoretically has room to surge 10x from its current $12.45 million market cap, according to crypto analyst ClayBro.
Check out Bitcoin ETF Token on DEXTools.
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