• $5.56 million worth of long positions will be liquidated if ADA falls below the $0.65 level.
• Whale transactions ranging from $1 million to $10 million have dropped by 83.54%, indicating a lack of confidence.

Amid market uncertainty, Cardano [ADA] is on the verge of a notable price decline as it approaches a key support level at $0.65.

This continued price drop raises concerns about the potential liquidation of long positions if the asset fails to hold this crucial support.

ADA was trading near $0.657 at press time, having recorded a 3.75% price decline over the past 24 hours. With the drop, participation from traders and investors has surged, leading to an increase in trading volume.

According to CoinMarketCap data, ADA’s trading volume during the same period has risen by 12%, indicating strong downside momentum for the asset.

Major liquidation areas

Looking at the trend, it appears that if this downside momentum continues, traders could face millions of dollars worth of asset liquidations, as reported by the on-chain analytics firm Coinglass.

Traders have been over-leveraged near the $0.65 lower side (support)and the $0.676 upper side (resistance), having built $5.56 million worth of long positions and $10.33 million worth of short positions at these levels.

Source: Coinglass

If the current market sentiment remains unchanged and ADA’s price continues to fall, breaching the lower boundary, there is a strong possibility that long positions worth $5.56 million could be liquidated.

Whales participation drops

Another metric currently strengthening ADA’s bearish outlook is the declining participation from whales and institutions.

According to the on-chain analytics tool IntoTheBlock, whale transactions worth $1 million to $10 million have dropped by 83.54%.

Source: IntoTheBlock

Additionally, transactions from investors in the $1,000 to $10,000 and $10,000 to $100,000 ranges have also declined significantly by 65.20% and 60.86%, respectively.

This drop in whale and investor participation indicates a lack of confidence and interest in ADA, which could push the asset’s price lower in the coming days.

Cardano price action and technical analysis 

According to expert technical analysis, Cardano was on the verge of a massive price crash at press time, as it approached the key support level of $0.65.

On the daily chart, this level has previously acted as strong support and often led to price reversals, but this time, it appeared more challenging.

Source: TradingView

Based on recent price action and historical patterns, if the asset fails to hold the key support level at $0.65 and closes a daily candle below it, it could open the path for a 20% price decline.

So, ADA could potentially drop down to the $0.52 level.

ADA’s Relative Strength Index (RSI) stood at 44 and appeared to be heading toward the oversold area at press time, indicating weakening buying pressure and a possible continuation of the bearish trend.