ADA's Plunge: Oversold or Collapse Imminent?

Cardano's ADA token has been grappling with intense selling pressure, leading investors to question its future trajectory. After reaching heights above $1.20, the price has plummeted, currently trading around $0.617. The market sentiment has grown increasingly bearish, raising concerns about a potential full collapse or a temporary correction before a rebound.

The recent price drop has brought ADA dangerously close to key support levels. If these levels fail to hold, the possibility of further downside becomes a reality. However, technical indicators suggest that ADA might be in oversold territory, hinting at a potential recovery.

Analyzing Cardano's current price action, key support and resistance levels, and technical indicators reveals that ADA is at risk of crashing further or experiencing a reversal. The daily chart shows a clear downward trend, with lower highs and lower lows forming. The price is testing a key support zone that has historically acted as a strong barrier against further decline. The question now is whether this level will hold or if ADA is headed for a deeper collapse.

One of the most crucial levels to watch is the $0.60 support zone. This level has played a significant role in the past, acting as a strong base before major price recoveries. If ADA manages to hold above this level, it could see a bounce, leading to a short-term recovery. However, if bears push the price below this mark, the next major support lies around $0.40-$0.45, and failing that, a retest of the $0.20 region is possible.

The Relative Strength Index (RSI) on the daily chart is currently at 26.66, which is well into the oversold territory. Typically, an RSI below 30 suggests that the asset is undervalued, and a reversal could be imminent. However, in strong downtrends, assets can remain oversold for extended periods before recovering.

For ADA price to regain bullish momentum, it must break above key resistance levels. The first major resistance is around $0.80, which was a previous consolidation area. If bulls can push ADA above this level, the next target would be around $1.00-$1.20, where the price previously faced strong rejection.

While ADA is currently facing significant bearish