Increasing uncertainty in cryptocurrency markets has led Cardano (ADA) to fall to critical technical levels. Facing the risk of dropping below its 200-day moving average, is ADA offering a buying opportunity for long-term investors?

RISKY ASSETS NAVIGATING A TOUGH WEEK

Cardano was heavily impacted by the selling pressure dominating the cryptocurrency markets throughout the week. Investors exited risky assets due to increasing recession concerns in the US economy and uncertainty created by global trade wars. During this period, demand for the US dollar and treasuries increased while Bitcoin (BTC) dropped below $80,000. ADA also succumbed to similar pressure, falling from $0.80 to $0.63. The 200-day moving average (200DMA) is currently positioned around $0.66. Although ADA is resisting falling permanently below this level, technical indicators show that the risk of a further decline persists. If it fails to hold this level, a drop to $0.40 seems possible.

LONG-TERM OUTLOOK REMAINS STRONG

While short-term downside risks prevail, positive developments are capturing the attention of long-term Cardano investors. Particularly, the decrease in regulatory uncertainties in the US cryptocurrency market and the Securities and Exchange Commission’s (SEC) relaxing stance towards cryptocurrencies are considered positive developments for ADA. The SEC abandoning its claim to classify Cardano as a security could enable the project to grow more freely in the coming years.