The ADA price has climbed from $0.24 to $0.28, pushing above its 200-day EMA band and giving bulls something they have not had much of lately, visible momentum.

That move could extend toward $0.40 if the bullish momentum holds. But the derivatives data makes the story more interesting. This does not look like a straightforward short squeeze.

ADA Price Gains While Open Interest Climbs

Santiment’s data shows ADA rose roughly 10% between October 3 and October 5. Over the same period, open interest increased about 25% to $304 million, its highest daily close since at least early April.

Measured in coins rather than dollars, open interest still increased roughly 13%. In other words, traders were not simply watching their existing positions become more valuable. New positioning was entering the market. 

Whale Activity Adds Another Layer To Rally

Whale activity also picked up sharply during the move. Transactions worth at least $100,000 reached 413 on October 5, around 2.2 times the weekday average recorded between September 7 and October 2.

Also, Social volume was not exactly exploding, though. It stood at roughly 1.1 times that same baseline. So, yes, attention has increased. But it was not a full-blown social frenzy.

Short Covering Helped But Doesn’t Explain Everything

Some short covering likely contributed to the ADA price rally. Funding reached its most negative reading of the past month on October 2 before flipping positive.

Still, short covering normally reduces open interest. Here, open interest increased instead.

That leaves the ADA price with a more complicated setup, a move above the 200-day EMA, strong open interest, elevated whale transactions, and some evidence of short covering. If momentum continues, $0.40 becomes the next stated upside target, but the data doesn’t guarantee that outcome.