Cardano (ADA), one of the leading cryptocurrencies, has experienced a challenging period, leaving investors and analysts divided over its short-term and long-term potential. The overall sentiment surrounding ADA remains bearish, but there are glimmers of hope as some analysts point to possible price surges on the horizon. Currently, ADA is trading in a correction phase, prompting market participants to focus on key support and resistance levels that will determine its future direction.

As Cardano navigates this turbulent period, analysts have provided differing forecasts, citing both optimistic and cautious scenarios based on technical analysis. With some predicting a potential breakout and others warning of further declines, the big question is whether Cardano will bounce back or continue its downward spiral.

The Importance of $0.22: A Crucial Support Level

One of the more optimistic projections comes from market analyst Mafeo Ferrari, who has identified a “rounded bottom” pattern on Cardano’s chart. This pattern suggests that ADA is potentially in an accumulation phase following its current downtrend, which could lead to a future rally. However, the analyst is quick to stress the importance of the $0.22 support level, which is critical for maintaining Cardano’s structure.

If ADA holds above this key level, MafeoFerrari believes the cryptocurrency could begin a significant ascent by 2025, with a price target of $4.6537 by December 2026. Such a rally would mark a substantial recovery for ADA, giving long-term holders something to look forward to.

However, the analyst warns that if ADA breaks below $0.22, the consequences could be severe. A drop to $0.13 may follow, a level that coincides with the 61.8% Fibonacci retracement—a crucial technical indicator used by traders to identify possible support or resistance levels. If Cardano falls to this range, it could signal deeper challenges ahead, with further downside risk in play.

Short-Term Resistance: A Glimmer of Hope?

In the shorter term, Cardano faces both challenges and opportunities. Analyst juntech has shared additional data that focuses on short-term movements, particularly in relation to the Federal Reserve’s monetary policy decisions. According to juntech, if the Federal Reserve’s Federal Open Market Committee (FOMC) opts to cut interest rates by 25 or 50 basis points, it could trigger a short-term price boost for ADA.

In this scenario, Cardano’s price could rise to $0.7098 in the coming months, offering hope for a potential rebound. This optimistic outlook is contingent on favorable market conditions and a lack of major headwinds. If these factors align, traders could see ADA regain some of its lost momentum, though it would still be far from its all-time highs.

Juntech’s analysis provides a sense of optimism for investors hoping for a near-term recovery, but it’s also important to recognize that such a scenario depends on external economic factors, including decisions made by the Federal Reserve. Should the market conditions deteriorate, the potential for a short-term rally could fade quickly.

Bearish Technical Indicators: Caution Ahead

Despite some analysts’ bullish predictions, there are still significant bearish signals weighing on Cardano’s future. Another prominent analyst highlights a more cautious view, emphasizing that ADA remains trapped in a bearish trend. The cryptocurrency is currently trading below its 200-day Exponential Moving Average (EMA), which is often seen as a key indicator of an asset’s long-term momentum.

In addition to trading below the EMA200, Cardano recently failed to break out of a rising wedge pattern on its daily chart, encountering strong selling pressure. This failure to break above key resistance levels is a concerning sign for those hoping for a reversal.

The Moving Average Convergence Divergence (MACD) indicator, a tool that helps traders understand shifts in momentum, has also formed a bearish crossover, signaling further downside risk. This crossover is often seen as a precursor to continued declines, suggesting that ADA could be poised for further losses.

Based on Fibonacci ratios, this analyst projects that Cardano could decline to $0.2506, with the possibility of further drops to $0.2197. However, all hope is not lost. The analyst notes that if ADA manages to break above the $0.3815 resistance level, it could trigger a bullish reversal, potentially leading to a recovery.

What’s Next for Cardano?

As Cardano continues to fluctuate, the coming weeks and months will be crucial in determining its short-term and long-term trajectory. The $0.22 support level remains the most critical factor for ADA’s immediate future. If it holds, the door may open for a potential rally, especially if favorable market conditions align.

For now, traders and investors should keep a close eye on both short-term resistance levels and broader market trends. The potential for a short-term rebound exists, especially if the Federal Reserve’s policies shift in a way that benefits the crypto market. However, the bearish technical indicators and the risk of a drop below $0.22 should not be ignored.

Cardano’s future hangs in the balance, with a breakout or a breakdown possible depending on how it navigates these critical levels. Investors looking for a long-term recovery may need to exercise patience, while short-term traders should remain cautious of the potential risks ahead.