Cardano Surges on Short Squeeze, Experts Warn of Overbought Conditions

Cardano (ADA) has surged by 10.46% in a single session, reaching an intraday peak of $0.26 and closing at $0.23 on Binance spot. This move is being characterized as a short squeeze rather than a genuine breakout bid.

The reclaim of the 200-day simple moving average (SMA) at $0.22 has been seen as a bullish signal, with every shorter-term average below it also in alignment. However, the technicals are split, with momentum indicators confirming the directional move but RSI reaching an elevated level of 77.77.

The positioning data shows that both retail and institutional-proxy accounts are skewed aggressively long, but the open interest has dropped by 12.4% in the last 24 hours, indicating a short squeeze. The funding rate is neutral at 0.0100%, offering no edge for shorts or longs.

Experts recommend caution, advising traders not to chase the price action and instead wait for a confirmed pullback or a decisive daily close above $0.26 on expanding volume. A rejection at or below $0.26 could lead to a retest of $0.21 support within 48 hours.