Cardano’s (ADA) price action has captured the attention of crypto enthusiasts after a significant drop in recent days. As of February 25, 2025, ADA’s price plunged by 13%, landing at the critical $0.65 support level. This level is crucial for ADA’s short-term future, with the potential for either a price surge or a sharp decline depending on how it holds.

At press time, ADA was trading at $0.665, experiencing a 90% surge in trading volume over the past 24 hours. While this uptick in volume suggests increased market activity, it doesn’t necessarily signal a price rally. Such spikes typically happen when assets break out or break down from key price patterns, leading to heightened volatility. Traders are now faced with key decisions—whether to liquidate their positions or continue holding.

ADA’s Price Action and Support Levels

Technical analysis suggests that ADA may be forming a bullish double-bottom pattern on the daily chart. A double-bottom formation occurs when an asset’s price drops to a low, rises slightly, then dips again to the same level before rising once more. This pattern historically indicates a potential upward trend. However, the recent drop to $0.65 has placed ADA at a critical juncture.

The $0.65 support level is significant, as it has historically acted as a reversal point for ADA. If the price manages to stay above this level, there is a strong possibility it could rise by 25%, potentially reaching $0.85 in the near future. On the flip side, if ADA falls below this level, a drop of 30% to $0.45 could be on the horizon.

The Role of Leverage and Market Sentiment

Despite the price decline, on-chain data reveals that long-term holders appear to be accumulating ADA tokens. According to analytics firm Coinglass, over $8 million worth of ADA tokens have flowed out of exchanges in the past 24 hours, suggesting that investors may be accumulating more ADA in anticipation of a price rebound. This accumulation could create upward buying pressure, potentially fueling a future rally if ADA holds key support levels.

However, the market sentiment remains cautious. Traders are predominantly betting on the short side, with short positions outnumbering long positions. This is reflected in the on-chain data, which shows that short traders have placed approximately $17 million worth of short bets. If ADA’s price rises to $0.708, these short positions could face a significant squeeze, with $17.3 million worth of short positions potentially being liquidated.

Conversely, if ADA’s price drops to $0.634, around $3.08 million worth of long positions could be liquidated. These liquidation points highlight how leveraged positions could dramatically impact ADA’s price, leading to rapid price swings.

What’s Next for Cardano?

As ADA navigates these critical levels, its price is at a crossroads. Traders should closely monitor the $0.65 support, as a failure to hold this level could lead to further losses. On the other hand, if ADA can sustain its position above this support, it could see a substantial rebound, with the potential for a 25% rise to $0.85.

For now, the next move for Cardano will depend on how it reacts to the current market conditions and whether long-term holders continue to accumulate ADA, or if short traders will prevail in pushing the price lower. The coming days will likely determine whether ADA can overcome the current volatility and head toward higher price levels, or if the market will shift toward a downward trend.

As always, risk management remains critical in such volatile conditions, and traders should keep a close eye on these key price levels for signs of the next move.