TLDR
- Cardano plans to convert part of its $1.2 billion treasury into Bitcoin and use the yield to buy back ADA
- ADA price recently declined below $0.70 and $0.680 support levels
- A key bullish trend line is forming with support at $0.630 on the hourly chart
- The cryptocurrency is currently trapped in a pump-and-dump cycle with thin liquidity
- Major support levels remain at $0.630 and $0.620, with resistance at $0.6560 and $0.6720
Cardano’s price has been experiencing a downward trend recently, falling below several key support levels while the project announces a major treasury strategy involving Bitcoin. The cryptocurrency has dropped below the $0.70 and $0.680 marks, putting it in what analysts describe as a bearish zone.
The decline continued as ADA moved below $0.680 and reached a low of $0.6134. Recently, there has been a small correction with the price climbing above $0.620 and $0.6350 levels. This represented a move above the 23.6% Fibonacci retracement level of the downward movement from the $0.7311 swing high to the $0.6134 low.
However, sellers remain active near the $0.6560 price point. Cardano is now trading above $0.620 and the 100-hourly simple moving average. Technical analysis shows a key bullish trend line forming with support at $0.630 on the hourly chart of the ADA/USD pair.
Looking at resistance levels, ADA might face challenges near the $0.650 zone. The first key resistance is near $0.6560, with the next important level at $0.6720, which is close to the 50% Fibonacci retracement level of the recent downward move.
Bitcoin Treasury Strategy
In a potential game-changing move, Charles Hoskinson has confirmed Cardano’s new treasury strategy. The plan involves converting part of Cardano’s $1.2 billion treasury into Bitcoin and using the yield to buy back ADA tokens.
This strategy creates a feedback loop designed to gradually reduce supply and support price appreciation. At current prices, Cardano could acquire approximately 11,320 BTC with its treasury reserves.
If Bitcoin prices rise to $110,000, that position would generate unrealized gains of around $40 million. These funds could be redirected into ADA buybacks, potentially purchasing about 66.67 million ADA at the current price of $0.60.
The approach aims to reduce the circulating supply while reinforcing price support. Though not yet implemented, this high-conviction strategy could reshape ADA’s long-term value trajectory.
Market Challenges
Cardano’s $0.60 support zone has been structurally fragile, with large holders showing signs of retreat. The ADA/BTC pair has retraced to pre-election lows, indicating weakening relative momentum.
Futures order books reveal a lack of aggressive bids, keeping speculative liquidity thin and reducing short-term upside pressure. These factors suggest Cardano is trapped in a pump-and-dump cycle where smart money isn’t buying dips but may be selling into strength.
ADA has posted two lower lows this month, increasing the probability of a deeper correction. In this volatile setup, even modest selling could spark broader panic, particularly among retail participants.
If Cardano’s price fails to climb above the $0.6720 resistance level, it could begin another decline. Immediate support is near $0.630, with the next major support at $0.620. A break below this level could open the door for a test of $0.60, with the next major support near $0.5650.
Technical indicators show the MACD for ADA/USD gaining momentum in the bearish zone, while the RSI remains below the 50 level.
The treasury proposal marks a paradigm shift. Instead of relying on traditional DeFi staking rewards, Cardano aims for real yield through Bitcoin. If successful, this approach could establish a new standard not just for ADA, but for how Layer-1 blockchains manage long-term value.
Cardano’s price currently stands at the crossroads of technical support levels and an innovative treasury strategy that could determine its future trajectory.
