Key Highlights
- ADA rose about 11% to $0.270, while open interest jumped 25% to $304 million.
- Santiment said the rally was not just a short squeeze, as fresh positions and leverage entered the market.
- Whale transactions hit 413 on October 5, about 2.2 times the usual weekday average.
Cardano’s ADA token is climbing but new data from Santiment suggests the rally may be about more than short sellers rushing to close losing trades.
In a post on X, the analytic firm said the token has gained about 10% between October 3 and October 5, while open interest has also surged sharply, indicating that new positions were also entering the market.
Ada climbs as open interest jumps 25%
According to data from CoinMarketCap, ADA closed around $0.244 on October 3 before climbing to about $0.270 on October 5, giving the token a gain of roughly 11% in two days.
During that same period, Santiment reported that the open interest jumped about 25% to $304 million. Santiment said this was the highest daily close for ADA open interest since at least early April.
Why rising open interest matters
Open interest refers to the total value of futures and other trading positions that are still open. When traders close their positions, open interest usually falls. That makes the rise in open interest significant when assessing whether ADA’s move was primarily a short squeeze.
A short squeeze happens when traders who bet that an asset will fall are forced to close their positions after the price moves higher. Their purchase can then push the price up even more. That may have happened to some extent with ADA, but Santiment’s data shows that the market was also adding new positions as the price climbed.
The increase was not solely a result of ADA’s higher price. Santiment also measured open interest in ADA coins instead of dollars and found that it still increased by about 13% between October 3 and October 5. This indicates that new positions were being added.
Funding data also shows that short traders were active before ADA moved higher. Funding reached its most negative level in a month on October 2 before turning positive as ADA gained. This suggests that some traders betting on a fall may have closed their positions as the market moved against them.
Short covering still plays a role
Santiment therefore did not completely reject the short-squeeze explanation. Instead, it argued that short covering happened alongside fresh leverage.
“Was $ADA’s rally really a short squeeze?” The platform added, “Some short covering likely helped: funding hit its most negative reading of the past month on Oct 2, then flipped positive. But covering shrinks open interest, it doesn’t grow it.”
Whale activity also picked up during the rally. Santiment recorded 413 transactions worth at least $100,000 on October 5.
That was about 2.2 times the weekday average between September 7 and October 2. Social volume, however, was only around 1.1 times the same comparison level. This indicates large-value transactions increased much more than public discussion around ADA.
Analysts see room for recovery
The price action has also attracted bullish technical views. Analyst Giannis Andreou identified the 0.23–0.27 area as an important support zone for ADA, while his chart shows 0.30–0.40 as the next major resistance area.
The chart also points to $0.80, $1.30 and, eventually, $3.10 as possible levels if ADA continues to move higher. However, these are technical targets from the analyst’s chart and are not confirmed price levels. The setup would also be invalidated if ADA records a weekly close below $0.14.
Other analysts have also shared bullish views . Dan Gambardello said, “The Cardano escape is loading,” while Bitcoin analyst Lucky Luciano also said in a post on October 5 that, “In my opinion, ADA is setting its tone for another parabolic run.”
These views show that some analysts expect further gains, but they remain forecasts rather than confirmed outcomes.
For now, Santiment’s data shows that ADA’s latest rise came with both short covering and fresh market positions, with open interest and whale activity increasing as the token moved higher.
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