Cardano (ADA) may be faking weakness. After sliding 12% over the past month, ADA’s price has been flatlining around $0.587 for much of July. But while retail investor attention has slowed, on-chain data suggests something very different. A potential bear trap is forming.
Funding rates on major platforms remain negative
Despite stabilizing above $0.58, ADA's funding rate remains unchanged. On Binance, Bybit, and other platforms, the metric is still ranging from neutral to negative, meaning shorts are still betting against the price.
This is usually a sign of skepticism. The crowd is bearish and it is costing them. If momentum reverses and ADA starts to rise, this setup could trigger a short squeeze, where leveraged sellers are forced to buy back tokens as the price of ADA rises.
The funding rate reflects the cost of holding futures positions permanently. A negative rate indicates that shorts are dominant, but are also vulnerable if the trend reverses.
Exchange net inflow signals money is moving away from platforms
Exchange net flow data shows consistent outflows from trading venues. In other words, more ADA is being withdrawn than deposited, which is usually a sign that holders are moving tokens into long-term wallets.
This behavior often appears during periods of secret accumulation.
This does not guarantee that ADA prices will rise again, but it does indicate that ADA holders are reluctant to sell at current levels. The lack of supply on exchanges limits selling pressure, which could amplify future price moves as demand returns.
The number of ADA holders continues to expand
Wallet data shows a steady increase in the total number of ADA holders. Over the past six months, the number of unique addresses has increased to 4.5 million, a new yearly high.
This steady growth has occurred even as ADA has dropped from $0.90 to its current level around $0.58. Long-term investors are still in, and that belief base could act as fuel if momentum resumes. Divergences between price and wallet growth often precede larger trend reversals.
$381 billion in trading volume in 12 months
According to TapTools, Cardano recorded over $381 billion in trading volume last year, making it one of the most traded crypto assets globally.
This figure is even more surprising considering ADA's underwhelming price performance in recent months.
High volume shows continued interest, especially from traders and institutions unhindered by sideways price action, which could act as a catalyst as the next move begins.
Cardano Price Remains Stuck; OBV Divergence Shows Pressure
On the chart, ADA price remains inside a descending triangle pattern with resistance near $0.612 and support at $0.537. Additionally, ADA is currently trading at $0.58. This pattern usually breaks down to the downside, but ADA has not yet suddenly weakened.
Instead, the On Balance Volume (OBV) indicator is flashing an early signal.
While price remains stable, OBV has increased slightly, which implies that buying volume is appearing without pushing price up. That's usually how accumulation starts; quietly, unnoticed.
OBV tracks the direction of volume. When the indicator rises while the price remains stable, it shows that demand is gradually increasing.
If ADA breaks above $0.612, there will be little resistance until $0.66. But if $0.537 is lost, the structure will break down to the downside. For now, investors need to continue to wait, but the data is looking in favor of the bulls.