Cardano price tests $0.25 support as long liquidations mount, will it crash?

Cardano price fell over 5% towards $0.25 on Thursday, paring off a part of its gains seen on the previous day.

According to data from crypto.news, Cardano ($ADA) price fell 5.7% from $0.263 on Wednesday to $0.248 on Thursday morning before settling at the $0.25 mark.

This decline occurred amid a broader sell-off across the cryptocurrency market as investors booked profits after they sold the U.S.-Iran ceasefire news. Bitcoin (BTC), the bellwether asset, was down 1.2% below the $71,000 figure. Ethereum (ETH) fell by 3.4% while other major crypto assets, such as $BNB ($BNB), $XRP ($XRP), and Solana (SOL), were all in the red with even more significant losses.

As Cardano price fell, it caught highly leveraged long traders off guard across the derivatives market. Data from CoinGlass show that nearly $545K worth of long positions were liquidated in the past 24 hours, which is nearly nine times the amount of short positions liquidated in the same timeframe.

Long liquidations occur when traders who bet bullish are caught by falling prices and are forced to sell their positions to cover their margins. When long liquidations significantly outweigh short liquidations, the asset’s price often faces intense downward pressure as the forced selling creates a cascading effect.

Despite this volatility, reports indicate that whales are still betting on the token to go up. Notably, data from Santiment shows that the number of whales holding over 10 million $ADA tokens has hit a four-month high of 424 at press time. That represents a 5.2% jump over the past nine weeks, a clear sign that whales have been accumulating the token during these dips.

As such, if the whale accumulation trend continues to gain strength, they could attract the attention of retail investors. This, in turn, could potentially change the course of $ADA’s current price trajectory.

On the daily chart, Cardano price has entered a horizontal channel pattern where the price was previously trading since early February.

The altcoin broke below the pattern earlier on March 29 as risk-on sentiment withered from the crypto market amidst geopolitical concerns at that time. However, the recent Cardano rebound back into the channel suggests that bulls are attempting to reclaim control.

While the Supertrend indicator still points to some lingering bearishness as it remains red, the MACD line points to a slightly bullish momentum with a bullish crossover while still remaining under the zero line.

For now, the two trendlines of the channel mark the key resistance and support areas for the token. As such, a break below the lower trendline at $0.24 could signal a deeper correction, while if bulls manage to push the price above $0.30, it could spark a fresh rally toward previous highs.