Cardano [ADA] continues to rise, increasing 2.87% in the past 24 hours, with a weekly increase of 26.86%.
However, this may not be a direct continuation of the bullish trend. Although analysis shows that ADA is expected to reach a new high, potential market activities suggest this could be a trap.
Liquidity inflows peak
Liquidity in both the derivatives and spot markets has surged sharply in the past 24 hours.
In the derivatives space, open interest (measuring the total value of outstanding futures contracts) has increased by over 3%, reaching $1.21 billion, according to CoinGlass, adding approximately $48 million to the market.
This is the third time this year that OI has broken the $1.2 billion mark—the previous instance was in March when ADA was trading at $1.17, while for most of January, the price hovered around $1.
These liquidity inflows are typically seen as bullish signals, consistent with a previous rebound of over $1.2 billion, which historically indicates further increases.
The spot market is also showing strong bullish momentum.
Data from spot exchange Netflow (used to track net buying or selling pressure) indicates that over $14 million of ADA has been purchased in the past week.
This buying pressure helps maintain ADA's upward trend, with the token trading at $0.7522 at the time of writing.
On-chain confirmation of fund inflows is moderate.
Although smaller in scale, on-chain metrics also support the bullish trend.
In the past day, the total value locked (TVL) in protocols built on Cardano has slightly increased, indicating a rise in investor activity.
According to DeFiLlama, Cardano's TVL has now reached $333 million, reflecting growing confidence in the network and a long-term bullish outlook.
If the TVL continues to rise, it may further support the ongoing accumulation trend in the spot and derivatives markets, helping ADA maintain its bullish position.
However, analysis from AMBCrypto suggests this could be a trap—a potential bull trap—especially as ADA begins to rise.
Is an ADA bull trap forming?
Chart data suggests that a bull trap may be forming based on the liquidation cluster area (key areas where prices may concentrate).
A close look at the 24-hour liquidation heatmap reveals limited liquidity prior to ADA's current price, with clusters only reaching $0.78.
In contrast, a large amount of unfilled liquidity is concentrated below, extending down to $0.68.
As ADA remains in the bullish phase at $0.75, it may reach the liquidity cluster at $0.78, then sharply reverse to fill lower orders.
At the time of writing, the price is only $0.03 lower than the $0.78 cluster, suggesting this move could trigger a classic bull trap and liquidate long traders.
