The Cardano chart paints a neutral picture regarding the short-term price prospects of ADA. Currently, ADA is between the 50DMA at $1.0148 and the 21DMA at $0.94, as well as being around the middle of its recent range of $0.75-$1.30.
Moreover, its 14-day Relative Strength Index (RSI) is around 50, indicating that short-term market conditions are neither overbought nor oversold— a reading below 30 indicates an oversold market, while a reading above 70 indicates an overbought market. The indecisive tone of ADA trading should not come as too much of a surprise given the fundamental backdrop.
The price of Cardano, like most other major cryptocurrencies, has significantly risen after the election victory of the new president Trump, who advocates for cryptocurrency.
Given the macroeconomic headwinds that are building after the hawkish Fed meeting in mid-December, and traders who are currently in wait-and-see mode ahead of Trump taking office in 12 days, profit-taking and a pullback from highs make sense.
So, should traders buy this dip?
Is it time to buy the dip in ADA?
Any investors in ADA right now should be prepared to HODL through short-term adversity.
The current sell-off may continue if the official employment report on Friday leads to further macroeconomic risks in trading conditions.
It is quite possible that cryptocurrency markets will remain defensive ahead of Trump's inauguration.
Price movement after the 20th will depend on whether the Trump administration meets the hopes of the cryptocurrency market.
Will they create or hint at the intention to create a BTC reserve? Will Trump quickly sign other executive orders to mitigate the damage done to the industry by Biden's anti-crypto administration?