Cardano’s ADA jumped about 10% to above $0.27 this week, its highest daily close since early April, and on-chain analytics firm Santiment says the rally was driven by new leveraged positions rather than the short squeeze many traders assumed.
The token rose from the mid-$0.24 range on October 3 to a multi-month peak above $0.27 by October 5, its highest level since May. Over the same two-day window, open interest climbed about 25% to more than $304 million, its highest level since at least early April. Santiment’s analysts noted that a pure squeeze, where forced buybacks close out shorts, would shrink open interest. This one grew it, which points to fresh money entering the market.
Even measured in ADA rather than dollars, open interest rose about 13%, ruling out the explanation that the jump only reflected the higher token price. New positions were being opened as the move progressed, with traders adding leverage on the way up rather than closing out.
Whale activity spiked too
Santiment counted 413 whale transactions worth over $100,000 on October 5, about 2.2 times the weekday average recorded between September 7 and October 2. Social volume sat at roughly 1.1 times the same baseline, meaning price moved well ahead of public chatter. Rallies that outrun social volume tend to be position-driven rather than hype-driven, which can cut either way: they last longer but also unwind harder when positioning flips.
Short covering did play some part. Funding rates hit their most negative reading of the past month on October 2, a sign shorts were paying a premium to hold positions, then flipped positive as the rally got going. Covering shrinks open interest, and this one grew, so the covering effect was secondary.
| Indicator | Reading | What it suggests |
|---|---|---|
| ADA price | Up about 10% to over $0.27 | Highest daily close since early April |
| Open interest | +25% to $304M in two days | New leverage entering, not a squeeze |
| Open interest in ADA | +13% | Rules out a price-only effect |
| Whale transactions ($100K+) | 413 on October 5 | About 2.2x the prior month’s weekday average |
Not everyone reads it the same way
Other trackers drew a more cautious picture earlier in the move. On-chain observers noted that Cardano’s DEX volume actually fell during the initial rally, from $11.7 million on October 1 to $5.7 million on October 3, suggesting the buying came from centralized exchanges and derivatives rather than on-chain users. Spot volume did spike to roughly $1 billion in 24 hours after the $0.26 resistance gave way, but derivatives led, and squeezes fade quickly when real demand does not follow.
Technical analysts frame the current price zone as a decision point. ADA is testing a resistance confluence near $0.28-$0.29, where the 100-period three-day exponential moving average sits close to $0.286, overlapping the upper boundary of a distribution range between roughly $0.23 and $0.29 that capped the token repeatedly earlier this year. Previous tests of that upper boundary preceded declines of 25% to 50%, which is why the zone carries weight. A convincing three-day close above it would clear the range, the ascending channel that has guided the recovery from the June bottom near $0.15, and the moving average all at once, opening a path toward the 200-period three-day EMA near $0.387, roughly 40% above current levels. Another rejection would keep ADA inside the range and expose a pullback toward the $0.22-$0.225 support band.
ADA is up almost 100% from its multi-year low near $0.14 in late June, when skepticism about the protocol was at its peak. Even so, the token remains far below its 2021 high above $3. Institutional plumbing has been building in the background: the Cardano Foundation’s deal with Fireblocks will bring Cardano Native Tokens into institutional custody by March 2027, and Fireblocks has already connected RAW signing to Cardano through Iagon’s node infrastructure, letting approved clients stake and participate in governance from a regulated custody platform. Fireblocks has supported ADA custody and transfers since August 2021, so the new work is an expansion rather than a debut.
Derivatives positioning adds one more layer. Published data put the long/short ratio among top traders near 2.7 to 1, with retail similarly skewed long, while taker flow showed sellers still controlling aggressive order flow through the rally. That mix, bulls positioned but sellers executing, resolves in one of two ways: buyers step up and validate the positioning, or weak longs get flushed in a stop-hunt sweep toward the $0.23-$0.24 support zone. Funding has turned positive but modest, so there is no imminent squeeze in either direction and price discovery is likely to stay messy until a daily close settles the argument.
Analyst Crypto Patel said ADA now sits roughly 98% above his earlier accumulation zone and could enter its next macro expansion phase, with long-term targets from $0.50 up to $5.00. Another well-known Cardano bull, Dan Gambardello, posted in September that the coin could quickly reach $0.40 if it broke out, a level that now sits about 47% above the current price. Those are forecasts, not data, and the token’s history of sharp reversals argues for caution.
The more grounded takeaway is mechanical: fresh leverage entered a market that had been positioned short, and whether the new positions hold or unwind will likely decide whether ADA keeps the gains. The $0.26 level is the line that separates a breakout from a trap, and the $0.285-$0.30 cluster is where the larger trend question gets settled.