The increased uncertainty in the crypto markets has led to Cardano (ADA) falling to critical technical levels. Facing the risk of dropping below the 200-day moving average, does ADA present a buying opportunity for long-term investors?

RISKY ASSETS BEHIND A CHALLENGING WEEK

Cardano was heavily impacted by the selling pressure dominant in the crypto markets throughout the week. Investors exited risky assets due to growing recession concerns in the US economy and the uncertainty created by global trade wars. During this period, there was an increased demand for the US dollar and bonds, while Bitcoin (BTC) dropped below the $80,000 level. ADA also faced 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 dropping permanently below this level, technical indicators demonstrate that the downward risk persists. If it fails to hold at this level, a dip to $0.40 seems possible.

LONG-TERM OUTLOOK REMAINS STRONG

While downward risks dominate the short term, positive developments are attracting attention from long-term Cardano investors. Particularly, the easing of regulatory uncertainties in the US crypto market and the Securities and Exchange Commission’s (SEC) softening stance on cryptocurrencies are considered positive developments for ADA. If the SEC abandons its claim of classifying Cardano as a security, the project may have more freedom to grow in the coming years.