Cardano (ADA) has witnessed significant price fluctuations, experiencing a drop of 13% over the past 24 hours. As of February 25, 2025, ADA is trading at around $0.67, nearing a critical support level of $0.65. Despite this decline, the surge in trading volume by 110% signals heightened market activity. The combination of technical analysis and on-chain metrics presents a mixed outlook, indicating that ADA could experience either a sharp reversal or a continued downtrend in the near future.

Technical Analysis and Key Levels for ADA

ADA’s recent price movement has brought it close to the $0.65 support level. Historically, this price zone has acted as a reversal point, making it a crucial level for the cryptocurrency’s future price direction. Currently, ADA is showing a bullish divergence on its daily chart, indicating potential for upward momentum if the support holds.

Furthermore, ADA’s price action is forming a double-bottom pattern on the daily timeframe, which is considered a bullish signal. This pattern suggests that ADA could soon experience a significant price recovery, potentially rising by 20%, reaching the $0.84 mark in the coming days if it successfully holds above the $0.65 level.

On-Chain Metrics and Market Sentiment

On-chain data reveals mixed sentiment around ADA’s price movement. While there is a notable bearish outlook among traders, long-term holders and whales are showing confidence in ADA’s potential by accumulating tokens. According to on-chain analytics firm Coinglass, exchanges have seen a substantial outflow of $22 million worth of ADA tokens, suggesting that investors are positioning for potential price growth.

This accumulation by whales and long-term holders could exert upward pressure on ADA’s price, supporting the argument for a price rally. However, there are opposing signals from the short-term traders, who remain bearish and are placing significant bets on a price decline.

At present, key liquidation levels are at $0.663 on the lower side and $0.708 on the upper side. Traders are over-leveraged at these levels, with $3.25 million worth of long positions and $8.41 million worth of short positions. The presence of these over-leveraged positions implies that ADA could face increased volatility as positions are liquidated in the event of price movements in either direction.

Potential Scenarios for ADA’s Price Movement

There are two likely scenarios for ADA in the short term:

1. Bullish Scenario: If ADA manages to hold above the $0.65 support level, the price could surge by 20%, reaching the $0.84 mark. This would be in line with the bullish divergence and double-bottom pattern on the daily chart. Moreover, the outflow of ADA from exchanges and the accumulation by whales suggest that the token may see strong buying pressure in the coming days.

2. Bearish Scenario: If ADA fails to hold the $0.65 level and breaks below it, the price could continue its decline. The bearish sentiment among traders and the over-leveraged short positions indicate that a further drop in price is possible. The key liquidation areas at $0.663 and $0.708 are points to watch closely as they may dictate ADA’s next move.

Conclusion

Cardano’s price outlook for February 25, 2025, remains uncertain, with a mix of bullish and bearish indicators. The $0.65 support level is crucial in determining whether ADA can stage a recovery or face further declines. While long-term holders and whales are showing confidence in ADA’s potential, short-term traders are leaning towards a price drop. Traders should remain cautious, keeping an eye on key support and resistance levels to gauge ADA’s next price movement. If ADA holds the $0.65 support, a rally toward $0.84 could be in the cards, but a breakdown below this level could trigger further downside.