Cardano [ADA] surged 2.87% in the last 24 hours, with a weekly gain of 26.86%, signaling strong momentum

Key Points:

• Cardano [ADA] surged 2.87% in the last 24 hours, with a weekly gain of 26.86%, signaling strong momentum.
• Open Interest in ADA futures jumped to $1.21 billion, up over 3%, indicating rising institutional and retail interest.
• Spot market net inflows exceeded $14 million in the past week, reinforcing short-term bullish sentiment.
• On-chain TVL on Cardano-based protocols climbed to $333 million, reflecting growing ecosystem confidence.
• Despite the rally, technical signals suggest potential for a bull trap due to thin liquidity above current price.
• Liquidation heatmaps reveal a lack of resistance near $0.78, but heavy concentrations below at $0.68 may pull price down.
• ADA’s current level at $0.75 could lead to a false breakout before a deeper correction begins.

Price Surge and Market Dynamics

Cardano’s native token, ADA, has experienced a powerful surge recently, gaining 2.87% within a single day and delivering a staggering 26.86% rise over the past week. At the time of writing, it was trading at $0.7522, marking a significant recovery from earlier levels. This rapid ascent suggests a shift in investor behavior, possibly fueled by renewed optimism around the network’s developments and broader altcoin seasonality trends.

Despite the impressive move, this rally isn’t without red flags. The speed and volume of the climb raise questions about its sustainability. Historically, such sharp gains—especially following longer consolidation phases—can often precede either a breakout or a deceptive reversal known as a bull trap. The current structure of ADA’s movement shows signs that the latter might be more likely.

Derivatives Activity and Open Interest Expansion

One of the most telling indicators of market positioning is the surge in derivatives activity. According to CoinGlass, ADA’s Open Interest (OI) rose by more than 3% in the last 24 hours, reaching $1.21 billion. This marks the third time in 2025 that OI has surpassed the $1.2 billion threshold—previously seen during rallies in January and March when ADA traded closer to $1.20.

This influx of open positions typically reflects increased speculative interest and can act as a precursor to larger price swings. In previous instances, rising OI coincided with upward momentum. However, in the current context, where liquidity appears unevenly distributed, this metric could also signal heightened risk rather than pure strength.

Spot Market Accumulation and Net Flow Trends

The spot market paints a slightly different picture—one of sustained buying pressure. Over the past seven days alone, net inflows into ADA reached $14 million, suggesting real demand from investors who are less inclined toward leverage and more focused on long-term holding. These flows have helped sustain the recent uptrend and indicate that some market participants believe the token is undervalued at current levels.

Exchange netflows also reflect this accumulation phase, with more ADA being deposited than withdrawn. Such patterns usually precede stronger price action, especially when combined with rising on-chain activity. Yet, even with these supportive signs, structural weaknesses in the order book hint that not all buyers may be rewarded.

On-Chain Growth and DeFi Engagement

Beyond price and derivatives data, on-chain metrics offer another layer of insight. Total Value Locked (TVL) across Cardano-native decentralized finance (DeFi) protocols has ticked upward, now sitting at $333 million according to DeFiLlama. While still modest compared to Ethereum or Solana, this growth indicates improving utility and investor confidence in the ecosystem.

A rising TVL is often a leading indicator of sustainable adoption. As users begin interacting with dApps, providing liquidity, and locking up ADA, it creates a healthier and more resilient financial infrastructure. However, while this bodes well for long-term prospects, it doesn’t necessarily shield the asset from short-term volatility or manipulative price action.

Structural Weaknesses and Liquidity Gaps

Beneath the surface of this seemingly bullish setup lies a potentially treacherous structure. A liquidation heatmap reveals a concerning imbalance in available liquidity. There is very little resistance in the immediate upside path, with the next major cluster located around $0.78—just $0.03 above the current price.

Conversely, a large pool of unfilled orders exists beneath the current price level, extending down to $0.68. This configuration suggests that once the price hits the upper cluster, it may quickly reverse to fill the deeper liquidity below. If enough traders get caught on the wrong side of this move, the result could be a violent unwind of long positions—a classic bull trap scenario.

Risk of a False Breakout and Trader Psychology

At $0.75, ADA sits precariously close to a key resistance zone. Traders watching the charts may interpret any push above $0.78 as a confirmation of a new uptrend, prompting a wave of automated and manual buying. However, given the sparse liquidity ahead, such a breakout could easily turn into a trap if there aren’t enough buyers to absorb the selling pressure from lower levels.

The psychological impact of a false breakout cannot be underestimated. It can shake investor confidence and trigger cascading stop-losses, accelerating the downward spiral. Even though sentiment remains cautiously optimistic, the presence of such structural vulnerabilities raises the probability of a deeper correction before any legitimate rally can take hold.

Conclusion

Cardano’s recent performance has been nothing short of eye-catching, with ADA surging nearly 27% over the past week and crossing the $0.75 mark. Strong inflows in both spot and derivatives markets, coupled with rising DeFi engagement, point to growing interest in the network. However, these positive signals must be weighed against troubling structural imbalances in the order book.

The combination of elevated Open Interest, limited liquidity above, and concentrated support zones below sets the stage for a high-risk environment. What appears to be a bullish continuation could just as easily unravel into a bearish trap, catching unwary bulls off guard. While ADA’s fundamentals and on-chain health show promise, traders should remain cautious as the market tests whether this rally has the legs to continue—or if it’s simply setting up for a painful reversal.