Cardano surges 10% as shorts face liquidation but bears persist
Cardano [ADA] has surged 10% to reach a five-month high of $0.27, currently trading around $0.26. This rally was accompanied by a 297% spike in spot trading volume, signaling heightened market activity. The price jump caught many bears off guard, resulting in $2.1 million worth of short positions being liquidated. Despite this, traders continued to take bearish positions, injecting more capital into the derivatives market.
The altcoin’s open interest rose 18% to $635 million, while derivatives volume surged 355%. Futures inflows amounted to $337 million, slightly exceeding outflows at $321 million. However, the long/short ratio dropped to 0.71, indicating a prevailing bearish sentiment among traders.
While the rally showed strong momentum, there were signs that ADA holders might be preparing to take profits. Exchange deposits increased, with spot netflow standing at $1.34 million, up from $1 million the previous day. This positive netflow suggests that more ADA is available for potential selling, which could slow the rally if those tokens hit the market.
Technical indicators like the True Strength Index (TSI) and the 20-day Exponential Moving Average (EMA) supported a bullish outlook. If Cardano can maintain its current momentum and clear the $0.28 resistance, it could target $0.30. However, sustained spot selling could weaken support, potentially pushing the price down to $0.22 if it breaks below $0.24.