According to some analysts, the Trump effect on the price of ADA, the cryptocurrency of Cardano, might have already run its course.
The hypothesis is that it was not an effect based on the fundamentals of the Cardano project, but mere speculation on ADA.
The Trump effect on the price of Cardano (ADA)
Until the day before the elections, the price of Cardano’s cryptocurrency was hovering below $0.37.
It was a lateralization that began in March, after a drop from $0.77 at the end of 2023.
Practically no one had predicted that the victory of Trump could have such a significant impact on the price of ADA.
And instead, starting from the day of the proclamation of his victory, it began to rise, initially returning just above $0.37.
So, in reality, it wasn’t exactly Trump’s victory that made ADA take off, but what happened in the following days.
On November 8, the price had already returned to $0.44, but it was on the 10th that it made the biggest spike, thanks to which it almost reached $0.64.
It is possible that the rumor, according to which Trump might remove the taxation on capital gains generated by the sale of criptovalute issued by US companies, has especially influenced.
Note that, however, the Trump effect lasted in the following days as well.
In fact, on November 16, the price of ADA returned to $0.77 at the end of 2023, and today it even surpassed $0.80, a figure it hadn’t reached since May 2022, although still 73% below the all-time highs.
Will the Trump effect on the price of Cardano (ADA) fade soon?
According to some analysts, there are some data suggesting that a considerable part of these gains could be lost in the coming days.
These are just hypotheses at the current state, based on the fact that the price of ADA is showing signs of a potential downside risk, due to a bull pattern of an ascending wedge on the 4-hour chart.
Technical analysis does not provide certainties, so it is not possible to state that the price of Cardano’s cryptocurrency will definitely decrease in the coming days. However, since it is based on statistical, and therefore probabilistic, data, there seems to be some probability that this will indeed happen.
The problem is that, in these cases, often a potential drop below the lower trend line of the wedge could generate a deep break of the support. In such a case, ADA could return below 0.6$ in the short term, and to 0.5$ in the medium/short term.
The potential decline
It should be noted, however, that we are not talking about a return to the initial levels, namely $0.37, but only a return to the values of October 10, those following the first bull push.
The hypothesis, therefore, is that only the gains from the second push, the one from November 15th, which is still ongoing, may be lost.
The problem is that, to try to approach the highs, one must face and overcome the hurdle of $0.90, which is the price level it had at the beginning of May 2022 before the implosion of the Terra/Luna ecosystem.
Since then, it has never even managed to firmly get back above $0.80, although today it is trying.
The lows of 2023, set at $0.24, currently seem very distant.
In reality, however, even the highs of 2021 ($3.10) still seem decidedly very distant, so much so that there are no signs indicating a return to those figures in the medium/short term.
The Cardano project
Cardano is a third-generation crypto project (the one following Ethereum, but preceding that of Solana), which has never really managed to take off yet.
In general, crypto projects perform well if a good DeFi develops around them.
On Cardano, however, the DeFi languishes.
If Ethereum has a TVL of almost 60 billion dollars, Cardano stops at 500 million, which is less than one cent.
What is surprising is that even the major layer-2 of Ethereum, that is, chains of generations following that of Cardano, perform better, with, for example, Polygon surpassing the billion-dollar mark, doubling Cardano.
Even the newcomer Sui surpasses it by far, with almost 1.5 billion in TVL, not counting the over 8 billion of Solana and the 5 billion of BNB.
On the other hand, the Cardano project has not focused on financial services but on services outside the financial world, and perhaps this strategic choice has held it back a lot.
Nowadays, cryptocurrencies are not at all widespread outside the financial world, and therefore those that do not base their success on finance tend to underperform the others.
