Cardano (ADA) is experiencing one of its most dynamic rallies in recent months. Over the past 24 hours, the price increased by 2.87%, with a strong weekly gain of 26.86%. But beneath the surface, danger might be looming. Market data suggests this could be a classic bull trap ready to catch unwary investors.
đš Sudden Liquidity Inflow: Sign of Strength or Trap?
In the past 24 hours, Cardano saw a liquidity inflow of approximately $48 million, mostly on the derivatives markets. Open Interest (OI) on futures contracts jumped by over 3% and exceeded $1.2 billion â a threshold ADA has crossed for the third time this year. Historically, this level has often signaled upcoming upward momentum.
At the same time, the spot market sentiment is also bullish. According to Netflow indicators, over $14 million worth of ADA was purchased on exchanges over the past week, indicating rising investor demand.
At the time of publication, the token was trading at $0.7522, maintaining its bullish momentum.
đš On-chain Data Confirms Continued Interest
Blockchain metrics further support growing investor engagement. The Total Value Locked (TVL) in Cardano protocols increased to $333 million, according to DeFiLlama. This reflects growing confidence in Cardanoâs ecosystem and fuels long-term optimism.
If TVL continues to rise, it could support further accumulation of ADA in both spot and derivatives markets.
â ď¸ Bull Trap Forming?
Despite the upbeat numbers, technical indicators reveal a potential reversal risk. An analysis of liquidity cluster zones suggests that ADA could approach $0.78, where the last major liquidity cluster sits. However, below the current price lies a significant area of untapped liquidity around $0.68.
This setup increases the chance of a sharp drop after hitting $0.78, potentially liquidating long positions taken by bullish traders.
đ Summary: Rising â But at What Cost?
Cardano is currently benefiting from a positive sentiment and strong liquidity. But this very liquidity might become a double-edged sword, especially if it's used to trigger liquidation zones and trap bulls. Investors should stay cautious and monitor price action closely around the key levels of $0.78 and $0.68.
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