Cardano's native token ADA surged approximately 10% over a two-day period ending October 5, reaching a multi-month high above $0.27. The rally marks the latest chapter in ADA's recovery from a multi-year low of under $0.14 in late June, representing a near 100% gain from that trough.
Open Interest Points to New Positioning
Analysis from Santiment challenged the notion that short covering alone drove the move. Open interest increased roughly 25% to over $300 million during the same two-day window, reaching its highest daily close since at least early April. Measured in ADA coins rather than dollars, open interest still climbed approximately 13%, indicating traders were establishing new leveraged positions as prices rose.
Supporting this finding, whale transactions exceeding $100,000 reached 314 on October 5, approximately 2.2 times the weekday average from the previous month. Social volume on the same date sat at roughly 1.1 times its baseline average.
Limited Role for Short Covering
While short covering likely contributed to the rally, the data suggests its significance was overstated. Funding rates hit their most negative level of the past month on October 2 before turning positive. However, as Santiment noted, closing short positions typically reduces open interest rather than expanding it, making the observed increase in OI inconsistent with a short-squeeze narrative.
ADA has ranked among the top performers in the past week, outperforming most other larger-cap altcoins during the period.
