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In a recent video analysis, popular crypto analyst Dan Gambardello explored the potential future of Cardano (ADA) prices amidst troubling forecasts of a US recession. With a significant following of 369,000 on YouTube, Gambardello underscored the general unease among ADA holders and crypto investors due to ongoing economic discussions about a potential recession.
Will Cardano Bottom In December?
Gambardello drew parallels between historical S&P 500 behavior and current market conditions, noting, “On average, the S&P 500 bottoms three months after a recession begins, but 10 months before the recession ends.” This observation is crucial as it sets a potential timeframe for when investors might expect the crypto market, including ADA, to bottom out.
“I give it a 50/50 odds that we’re in a recession now. Check this out. The Fed has signaled that September interest rate cut is coming all but two times in history when the Fed has started to cut rates, a recession followed,” Gambardello suggested, explaining that recession starts are usually declared only once they have already begun.
He further elaborated that the prevalent discussion about the US already being in a recession could impact investment strategies. According to Gambardello, if history repeats itself, the market could see its lowest point in December 2024. He based this on a detailed review of market downturns since 1957, which typically show significant movements three months following the onset of a recession.
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“I just think whenever the bottom will be in, it is going to be explosive […] oftentimes [they declare] it 10 months later and they’re like ‘hey, you know what, the recession started 10 months ago. Nobody, there’s no exact science to when it starts, not like a set date but 3 months after it, the bottom is in for markets,” the crypto analyst noted.
Gambardello then addressed the Federal Reserve’s signals about upcoming interest rate cuts, which historically have been followed by recessions. This pattern adds another layer to the already complex market analysis, suggesting that a recession might indeed be imminent or already underway. “All but two times in history when the Fed has started to cut rates, a recession followed,” he remarked, highlighting the gravity of the current economic signals.
ADA’s Market Performance and Historical Data
Shifting focus to Cardano, Gambardello juxtaposed ADA’s current market performance against its historical data. He pointed out that, similar to previous cycles, ADA is currently down by 89% from its peak, closely mirroring its past downturns where it was down by 94% at similar points.
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“We’re down 89%. So put it all aside, Cardano is not doing anything different than it did last cycle. And the one thing I did notice though was from this 2018 high to when Ada made its way to where we are right now is, that was around 992 days after that all-time high. This time around and this is why I think it feels a little bit more painful for Cardano holders this time around, we’re looking at almost 1,100 days from all-time high to this moment right so it’s been very grueling,” Gambardello stated.
Bitcoin’s Influence and the Potential for Altcoin Season
Moreover, he analyzed Bitcoin’s influence on altcoins like Cardano. He discussed the potential for an ‘altcoin season,’ a period when altcoins typically surge if Bitcoin’s market dominance begins to wane. According to his analysis, such a season isn’t currently in play but could be on the horizon, correlating with his predicted market bottom in December. “Most altcoins, especially the blue chips, especially the top altcoins, are going to fly when market bottoms and crypto bounces,” Gambardello said.
Conclusion and Investment Strategy
Concluding his analysis, Gambardello adopted a cautiously optimistic tone. He acknowledged the uncertainties inherent in predicting crypto markets but underscored the importance of historical patterns and current economic indicators in formulating investment strategies. He advised his viewers to stay vigilant, keep an eye on market data, and be prepared for more potential downside, but also be ready for an explosive growth period that has historically followed recessions.
At press time, ADA traded at $0.3218.
Cardano price remains below the 20-day EMA, 1-day chart | Source: ADAUSDT on TradingView.com
