Cardano (ADA) liquidation risks soar as $34m flashpoints threaten collapse

Cardano (ADA) liquidation risks have soared as the price teeters above a crucial support level, with $34 million worth of leveraged long positions dangling just below $0.749.

While ADA remains up 18% over the past week, signs of buyer exhaustion and rising leverage point to a potentially dangerous breakdown.

Cardano (ADA) liquidation risks are now top of mind for traders and analysts alike. After rallying to a high near $0.93, ADA has slipped to $0.86 at press time.

Though still bullish on the weekly chart, the token is skating on thin ice technically—and structurally.

Liquidation clusters near $0.749, spell trouble

According to on-chain data from Coinglass, a dense cluster of long liquidations sits just below the $0.749 level.

This $34 million trap zone marks a minefield for bullish traders who entered leveraged positions expecting ADA’s surge to continue.

Should the price fall below that threshold, these trades will be liquidated en masse, intensifying downward pressure.

“When leveraged long positions stack under support zones, they act as a ticking time bomb. If ADA breaches $0.749, the forced selling could trigger a swift move down to $0.72 or even $0.68,” warned Matthew Hyland, a prominent crypto technical analyst on X.

Liquidations, a process where exchanges forcibly close losing leveraged positions, can act like an avalanche.

Once a key level breaks, it sparks an automated sell-off, often spiraling into a broader capitulation.

MVRV data hints at profit-taking pressure

The Cardano (ADA) liquidation risks are further amplified by sentiment metrics. The 30-day Market Value to Realized Value (MVRV) ratio flipped positive on July 8 and has been climbing ever since.

A positive MVRV suggests that the average trader is now in profit—an environment where holders are incentivized to lock in gains.

“MVRV going positive during overbought conditions is often a prelude to profit-taking,” said Santiment, a crypto analytics firm. “Combine that with liquidation clusters and you’ve got a cocktail for volatility.”

Technical indicators also reflect the rising Cardano (ADA) liquidation risks. The 14-day Relative Strength Index (RSI) recently reached 82.6—deep in overbought territory—before pulling back.

An RSI above 70 often signals unsustainable momentum, and with ADA already cooling to $0.86, the bulls appear to be losing their grip.

If selling picks up and support levels start giving way, cascading liquidations could rapidly push ADA toward $0.728 and lower.

Key support levels under threats

Currently, ADA is attempting to hold above $0.86—the 1.0 Fibonacci extension level. Beneath that, the next significant cushions lie at $0.84 and $0.81.

But if the $0.78 zone (a former resistance now acting as support) gets breached, the $0.749 level becomes the critical line in the sand.

“This isn’t just technical support; $0.749 is a psychological and structural level heavily guarded by leveraged bulls,” noted Ali Martinez, a market strategist at FXStreet. “If it collapses, the market could unwind rapidly.”

The Fibonacci trend extension, plotted from $0.51 to the swing high of $0.93 and back to $0.51, reinforces potential targets around $0.72 and $0.687—levels that align with the liquidation zones.

Can ADA avoid a full breakdown?

The Cardano (ADA) liquidation risks facing the market are not isolated. Leverage across altcoins has been rising sharply as traders chase momentum.

However, when sentiment flips—as indicators are suggesting—the unwinding can be brutal.

To avoid a cascade, ADA must defend $0.86 and especially $0.749. A bounce from these zones could reset bullish momentum.

But any sustained drop below these levels could accelerate into a flash crash scenario.

The combination of profit-taking incentives, weakening momentum, and $34 million in long exposure paints a risky picture for ADA.

With liquidation clusters mounting and RSI rolling over, Cardano (ADA) liquidation risks are no longer theoretical—they’re actionable threats.

Investors and traders should keep a close eye on the $0.749 level in the coming days. If it cracks, it could unleash a wave of automated selling that drives Cardano sharply lower.

The Cardano (ADA) liquidation risks continue to dominate market sentiment, posing a significant threat to short-term price stability. With over $34 million in potential liquidations, traders must stay alert.

If key support breaks, Cardano (ADA) liquidation risks could trigger a steep decline. Managing exposure is crucial as Cardano (ADA) liquidation risks mount and sentiment turns increasingly cautious.