Cardano Price at Risk for Violent Rebound if Support Zone Holds

Cardano (ADA) is trading near its support zone after losing over 8% this week, and analysts are warning of potential volatility if the price falls below $0.20.

Derivatives traders have turned bearish on ADA, with a long-to-short ratio of 0.93 indicating that short positions outnumber longs. The funding rate has also turned negative, with traders holding short positions paying those with long positions.

The concentration of short positioning could create conditions for a short squeeze if the price rebounds sharply, but analysts warn that heavily concentrated positions can also lead to greater volatility.