Cardano (ADA) is showing signs of a potential price rebound, but this might not be good news for everyone. Bearish traders could face losses worth millions if ADA makes a decisive move upward.
Bearish Pressure Dominates, But for How Long?
Currently, Cardano is trading at $0.71 after a 25% drop over the past week. The asset found support at $0.70, preventing further declines. Despite being in an oversold condition, ADA remains under pressure as bearish traders maintain control. The Relative Strength Index (RSI) has hit its lowest point in six months, signaling extreme selling pressure. Historically, such levels have led to minor recoveries, but ADA has struggled to capitalize on these moments.
Short Squeeze on the Horizon?
The liquidation map reveals over $4.66 million in short positions that could be wiped out if ADA rebounds to $0.77. This key resistance level holds significant importance. A breakout above $0.77 could trigger a short squeeze, forcing bearish traders to cover their positions, potentially driving ADA’s price up to $0.85.
However, if ADA fails to breach this level, it may continue to trade in a tight range between $0.70 and $0.77. This range-bound movement reflects the ongoing battle between bullish hopes and bearish dominance.
What’s Next for Cardano?
While ADA’s oversold RSI suggests bearish momentum is nearing exhaustion, a strong recovery remains speculative. The bullish falling wedge pattern has been invalidated, raising concerns about ADA’s ability to post significant gains in the near term.
For ADA to reach $1.00, it must first flip $0.77 into support and rally past $0.85. Without this critical breakout, ADA’s upside potential remains limited. Traders should watch for any shifts in buying momentum that could spark unexpected price movements.
In conclusion, Cardano’s price action in the coming days will be crucial. A decisive move could either trigger massive liquidations or keep ADA trapped in its current range.
