Cardano Avoids a Breakdown, Now Looks Ready To ‘Squeeze’ Out A Bounce

Core Insights - Cardano's price has experienced a 10% decline over the past week, yet it remains above the lower trend line of a bullish pattern, indicating buyer support [1] - The presence of large wallet interest and the current price structure suggest a potential for a short-term bounce in ADA [1][4] Price Structure and Market Dynamics - ADA has been trading within a falling wedge pattern, with its ability to stay above the lower boundary being crucial for potential upward movements [2] - The Chaikin Money Flow (CMF) is showing signs of recovery, indicating renewed interest from large holders, which often precedes price rebounds [3][4] Short Position Analysis - The derivatives market shows a significant short position in ADA, with short exposure at $93.15 million compared to long exposure of $24.46 million, suggesting a potential for a short squeeze [5] - A price increase of approximately 2% could trigger a wave of short liquidations, starting at a price point of $0.51, which may lead to accelerated upward movement [6][8] Momentum and Resistance Levels - For ADA to confirm a bounce, it needs to achieve a small gain of about 2%, with the first resistance level at $0.51 [8] - A further breakout attempt would require a price movement above the wider resistance zone near $0.64, which would indicate a shift in market structure and allow for a deeper rally [9]