Cardano (ADA), one of the leading cryptocurrencies in the market, has been facing a significant amount of pressure due to the current bearish market sentiment. As of March 8, 2025, ADA is experiencing a 5% price drop, marking a crucial point in its price action. Currently, the altcoin has reached a critical support level, raising concerns about whether the price can hold above it or will fall further.

Current Market Sentiment and Technical Analysis

The price movement of ADA has been closely tied to the broader crypto market sentiment. As market uncertainty looms, Cardano’s price is caught in a downward spiral, with the token trading near $0.827 at press time. This marks a 5% decline in the last 24 hours, and the trading volume has also experienced a 10% decrease, indicating lower participation from investors. This drop comes amidst an overall bearish outlook that has plagued most cryptocurrencies, with ADA failing to capitalize on recent market shifts.

Technical indicators suggest that ADA is now at a crucial juncture. The $0.81 support level is a critical price point for ADA. This zone has proven to be a strong support in the past, with significant buying pressure often emerging at this level. However, if the price falls below this support, there is a strong chance that ADA could face a sharp decline of up to 18%, potentially reaching $0.68.

Possible Rebound Scenarios

On the flip side, if ADA can hold above the $0.81 support level, there is a possibility of a price reversal. This could lead to a price surge of up to 35%, potentially driving ADA toward the $1.15 level in the future. The 200 Exponential Moving Average (EMA), which is often used to determine the long-term trend of an asset, is currently supporting ADA at this price point, indicating that the asset is still in an uptrend despite short-term bearish pressure.

If ADA can maintain its position above this crucial support, it could signal a rebound and the start of a new bullish trend. However, a break below the $0.81 level could indicate a continuation of the downward pressure, potentially triggering further declines in the coming days.

Market Liquidity and Leverage Impact

An interesting aspect of ADA’s current price action is the increasing presence of leveraged positions. According to on-chain analytics firm Coinglass, the lower side of ADA’s price action is over-leveraged at $0.804, while the upper side is capped at $0.84. These levels hold significant amounts of long and short positions, with $9.11 million worth of long positions and $5.45 million worth of short positions. This suggests that bullish sentiment is still prevalent among traders, and the price could see a rebound if the leveraged positions manage to hold.

However, leveraged positions also introduce an element of risk. When leverage increases, it amplifies both the potential for profits and losses. If ADA fails to hold the $0.81 support level, it could lead to a liquidation of long positions, which could push the price down even further. On the other hand, if the price rebounds and breaks above $0.84, it could trigger the liquidation of short positions, creating upward pressure on the price.

Looking Ahead

The next few days will be crucial for Cardano (ADA) as it faces critical price levels and market sentiment. If ADA manages to hold the $0.81 support and reverses the trend, a move towards $1.15 could be in the cards. However, if the bearish momentum continues and ADA drops below this support, it could see a sharp decline to the $0.68 level. Investors should closely monitor ADA’s price action and the overall market sentiment for clues on its next move.