#Cardano (ADA) is experiencing one of its most robust rallies in recent months, posting notable short-term gains. Over the past 24 hours, the token rose by 2.87%, contributing to an impressive weekly increase of 26.86%. While this performance suggests renewed investor confidence, underlying market signals point to the possibility of a bull trap forming—posing potential risks for traders and investors alike.
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🔹 $48M Inflow: Strengthening Market or Setting a Trap?
In the last 24 hours, Cardano recorded a liquidity inflow of approximately $48 million, predominantly within the derivatives market. Open Interest (OI) in $ADA futures rose by over 3%, surpassing the $1.2 billion mark—only the third time this milestone has been reached in 2025. Historically, reaching this threshold has coincided with periods of heightened price action and bullish momentum.
Concurrently, sentiment in the spot market remains positive. Netflow indicators show that over $14 million worth of #ADA was acquired on centralized exchanges over the past week, pointing to increasing demand and accumulation from investors.
As of the latest data, ADA is trading at $0.7522, maintaining its upward trajectory.
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🔹 On-Chain Metrics Reflect Growing Confidence
On-chain data further supports the narrative of rising investor engagement. According to DeFiLlama, the Total Value Locked (TVL) across Cardano’s DeFi protocols has climbed to $333 million, signaling increased trust in the platform’s ecosystem. Sustained growth in TVL could serve as a foundation for continued ADA accumulation across both spot and derivatives markets.
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⚠️ Is a Bull Trap Forming?
Despite the optimistic technical and on-chain signals, several warning signs suggest the potential for a near-term reversal. Liquidity cluster analysis indicates that ADA may rise toward $0.78, a level where significant historical liquidity is concentrated. However, just below the current price lies an untested liquidity zone around $0.68.
This market structure raises the likelihood of a sharp pullback once ADA reaches the $0.78 region—potentially triggering liquidations of long positions and trapping bullish traders in overleveraged positions.
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📊 Conclusion: Bullish Momentum with Cautionary Undercurrents
Cardano’s recent rally is supported by substantial inflows, rising OI, and growing on-chain engagement. However, the same liquidity that drives bullish momentum could also facilitate a swift reversal. With key resistance near $0.78 and support around $0.68, market participants are advised to approach ADA with caution and closely monitor price behavior around these levels.
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