Cardano (ADA) has faced a sharp correction in the past week, with its price plummeting by 23%, marking a significant downturn in the broader cryptocurrency market. As of the latest data, ADA is trading at $0.7312, a 4% drop from the previous day, amid increased selling pressure. However, the price has now entered what some analysts refer to as the “oversold” zone, suggesting that a potential rebound could be on the horizon, especially if buying momentum picks up.

Bearish Sentiment and Oversold Conditions

Despite the downturn, which has pushed Cardano’s Relative Strength Index (RSI) into oversold territory for the first time in six months, there is a mixed outlook for ADA’s near-term price action. Oversold conditions often indicate that a cryptocurrency is due for a correction or price recovery, but Cardano’s recent track record suggests that such signals do not always result in strong rallies.

Crypto analyst Ali Martinez has pointed out that ADA remains above its critical support range of $0.81–$0.67, which has provided some resilience. This support zone continues to hold despite the aggressive selling pressure, allowing the cryptocurrency to maintain a semblance of bullish momentum amid the market’s volatility.

Risk of Liquidations Looms Over ADA

According to data from CoinGlass, more than $4.66 million worth of ADA could be at risk of liquidation if the price rebounds toward the $0.77 resistance level. This highlights a significant amount of short positions betting on further declines. If a sudden surge in buying activity occurs, it could trigger short liquidations, reversing the current bearish trend. However, as of now, bears seem to have control, driving the funding rates into negative territory, which discourages bullish activity.

Is Cardano’s Support Level Enough to Drives a Recovery?

Cardano’s support at $0.70 remains a critical point for potential recovery. While the market sentiment has remained predominantly bearish, the cryptocurrency is still holding above its critical support zone, which provides hope for a potential bounce. However, this is not a guarantee. As history has shown, ADA has often struggled to capitalize on oversold conditions, and a recovery might be more gradual than many expect.

In the short term, ADA’s ability to break above the $0.81 resistance level will be crucial for reigniting bullish momentum. This breakout could serve as a signal for the market to push the price higher, potentially toward the $1.0 mark, as many traders are hoping for.

Will ADA See a Bounce Toward $1.0?

The current market conditions, coupled with the oversold RSI, create an interesting scenario for Cardano. While the overall market sentiment remains bearish, ADA has displayed resilience above its support range, and any positive shift in market conditions could trigger a strong rebound. However, ADA bulls will need to watch for a decisive breakout above $0.81 to confirm that bullish momentum is truly returning.

If Cardano manages to hold its ground above the support levels and gains traction in the market, a bounce back to $1.0 is not out of the question, though it remains uncertain. For now, the risk of further downside remains as bearish traders maintain control.