Cardano (ADA) triggered a large short squeeze during a short-term rebound, forcing the liquidation of more than $1 million in short-selling positions. The market is also focusing on the possibility of additional short liquidations after the token broke through a key resistance level.

U.Today reported on Sunday that about $1.09 million worth of short positions were forcibly liquidated as ADA prices rebounded.

The move came as futures markets were heavily skewed toward downside bets. Margin traders increased short positions, weighing the possibility that ADA could fall below $0.15, but prices moved in the opposite direction. ADA formed a short-term bottom around $0.150 in late July and then rebounded. Liquidations of short positions began in earnest after it broke above the $0.185 resistance level, where selling pressure had been concentrated.

On an hourly basis, ADA rose to $0.193 after moving above $0.185, triggering a chain of margin calls on short positions. U.Today said an attempt to break $0.185 became a clear turning point, and forced buying to cover short losses further pushed prices higher.

Liquidations were concentrated in short positions. CoinGlass data showed total ADA position liquidations of about $1.63 million, with more than $1.09 million coming from shorts. Liquidations of long positions were relatively limited. This is interpreted as meaning the move was not simply a price rebound but a process in which futures-market position imbalances were being resolved at the same time.

The market is now focusing on the significance of the $0.185 level. That range had previously acted as a strong resistance level, and there is a possibility it could shift into a new support after the rebound. An analysis said the area could also serve as a short-term defensive line even if additional gains continue.

Some technical overheating has also eased. The relative strength index (RSI) fell to 54.22, reducing overheating pressure somewhat, and the first short-squeeze phase also appears to have calmed for now. Still, there is also analysis that an unfavorable structure for short positions has not been fully resolved. A 'Max Pain' liquidity map shows large short positions remain concentrated just above the current price.

The next largest liquidation zone was suggested at $0.19396. Around $1.12 million worth of short positions are waiting at that level. That means a second short squeeze could occur if the price rises by about 4.45 percent, or about $0.008, from the current level. By contrast, a key risk zone for long positions is $0.17102. Because it would take a drop of more than 7 percent from current levels to reach that price, the analysis said upside liquidity is positioned closer than downside liquidity in the short term.

U.Today said the liquidity pool above the price is almost twice as close as the support area below, and forecast that if ADA tests around $0.194 again, remaining shorts could be liquidated further and volatility could expand again.