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Cardano Faces Crypto Crash but Shows Signs of Recovery
The recent cryptocurrency market downturn has significantly impacted Cardano (ADA). However, it appears that the worst may be behind it, giving investors hope for a positive start to 2025.
On Friday, Cardano’s price plummeted to $0.76, marking a more than 40% pullback from its recent highs.
The Federal Reserve’s Role in the Market Decline
The Federal Reserve’s unexpectedly hawkish guidance for 2025, allowing only two additional rate cuts, triggered a major sell-off across stock and crypto markets.
Despite the Fed meeting market expectations with a 25-basis-point rate cut, the S&P 500 suffered its largest post-Fed drop since March 2020, wiping out $1.8 trillion in market value.
This bearish sentiment also impacted ADA futures, leading to liquidations worth nearly $20 million, according to Coinglass.
Signs of a Rebound for Cardano
Despite these challenges, Cardano demonstrated resilience, rebounding from intra-day lows of $0.76 to approximately $0.95. The recovery allowed ADA to reclaim its 50-day moving average, signaling potential stabilization.
ADA’s session is poised to close with a bullish hammer candlestick. With no major U.S. economic events expected before year-end, attention may shift back to optimistic narratives around blockchain adoption.
Why Cardano Could Regain $1 and Beyond
Cardano is benefiting from several bullish factors. The cryptocurrency has remained a standout performer since Trump’s recent election victory, which spurred a rally in crypto markets.
Trump’s administration is expected to favor cryptocurrency, with pro-crypto figures taking prominent roles, including a new Crypto/AI czar and a crypto-friendly SEC chair.
Charles Hoskinson, Cardano’s co-founder, could potentially serve as an advisor to the administration. This development would mark a turning point for Cardano, which has struggled to compete with Ethereum and Solana in adoption.
Strategic Moves to Bolster Cardano’s Future
The Cardano community is urging the Cardano Foundation to actively engage with policymakers by matching Ripple’s significant donation to Trump’s inauguration. Such involvement could position Cardano as a major player in shaping the future of finance.
Additionally, Cardano aims to enhance its blockchain’s utility by becoming the primary BTC DeFi chain by mid-2025. This move, announced by Hoskinson, could significantly accelerate adoption.
Short-Squeeze Risk and Future Projections
A tweet from Deezy.eth suggests that many traders are shorting Cardano near the $1 mark. This trend could result in a short squeeze, potentially pushing ADA back to $1.30 if its recovery continues.
Looking ahead, a pro-crypto administration and Congress in 2025 could usher in a new era of growth for cryptocurrencies. Under these conditions, ADA may even retest its record highs above $3.
Exploring Alternatives to Cardano
While Cardano shows promise for potential 3x gains in 2025, some investors may seek higher returns in meme coin markets.
Popular meme coins like Dogecoin, Pepe, and Dogewithhat could offer 5-10x growth. Meanwhile, newer tokens, though riskier, may provide even greater upside.
One such option is Catslap (SLAP), a gamified cat-themed meme coin with a $14 million market cap on DEXTools. SLAP is running a $1 million giveaway, rewarding users for accumulating slap points.
As markets recover, meme coins like SLAP could emerge as some of the top performers by year-end.
The post Crypto Crash Hits Cardano Hard – Can ADA Hold $1 and Start 2025 Strong? appeared first on Cryptonews.
