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In a new video analysisPopular cryptocurrency analyst Dan Gambardello has weighed in on the potential future of Cardano (ADA) price amid the worrying forecast of a U.S. recession. With a massive following of 369,000 YouTube subscribers, Gambardello highlighted the general anxiety among ADA holders and crypto investors in general due to the ongoing economic rhetoric surrounding a potential recession.
Will Cardano hit bottom in December?
He drew parallels between the S&P 500’s historical behavior and current market conditions, noting that “on average, the S&P 500 bottoms three months after a recession begins, but ten months before a recession ends.” This observation is significant because it sets a potential timeframe for when investors might expect the cryptocurrency market, including ADA, to bottom.
“I think we’re in a recession now 50/50. Look at this. The Fed has signaled that a September rate cut is coming every time except two times in history when the Fed started cutting rates, a recession followed,” Gambardello suggested, explaining that the beginning of a recession is usually not announced until it has already begun.
He explained that the prevailing discussion about the US already entering a recession could affect 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 look at market downturns since 1957, which typically show large movements three months after the start of a recession.
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“I think when the market hits bottom, it’s going to be a blast (…) A lot of times (they announce) it 10 months out and they say ‘hey, you know what, the recession started 10 months ago.’ Nobody, there’s no exact science on when a recession starts, it’s not like a specific date but 3 months after that, the market hits bottom,” the crypto analyst noted.
Gambardello then addressed the Fed’s signals about upcoming rate cuts, which have historically been followed by recessions. This pattern adds another layer to an already complex market analysis, suggesting that a recession may be imminent or already underway. “Every time, except twice in history, when the Fed has started cutting rates, a recession has followed,” he said, highlighting the seriousness of the current economic signals.
Focusing on Cardano, Gambardello compared ADA’s current market performance to its historical data. He noted that similar to previous cycles, ADA is currently down 89% from its peak, closely mirroring its previous downturns where it dropped 94% at similar points.
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“We’re down 89%. So all that aside, Cardano isn’t doing anything different than it did in the last cycle. The one thing I noticed is that from the 2018 high to when Ada made its way to where we are now, it was about 992 days after the all-time high. This time around, that’s why I think it’s more painful for Cardano holders this time around, we’re looking at about 1,100 days after the all-time high at this point, so it’s been very stressful,” Gambardello said.
Furthermore, he analyzed Bitcoin’s impact on altcoins like Cardano. He discussed the possibility of an “alt season,” a period in which altcoins typically rally if Bitcoin’s market dominance begins to wane. According to his analysis, such a season is not currently in play but could be on the horizon, in line with the expected market bottom in December. “Most altcoins, especially the leading ones, will rally when the market bottoms out and cryptocurrencies rally,” Gambardello said.
Concluding his analysis, Gambardello struck a cautiously optimistic tone. He acknowledged the inherent uncertainty in predicting crypto markets, but emphasized the importance of historical patterns and current economic indicators in formulating investment strategies. He advised viewers to remain vigilant, monitor market data, and prepare for potential further declines, but also prepare for an explosive growth period that follows historical recessions.
At the time of publishing this report, ADA was trading at $0.3218.
Featured image by Shutterstock, chart by TradingView.com
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