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Cardano is showing signs of life after the continuous stalemate in the market, but the current volume recovery is unlikely to be the foundation for a rapid retracement.
Trading activity moving forward
The biggest change is the dramatic rise in trading activity. Volume has increased by about 78% on all major exchanges, indicating a resurgence of interest in ADA following months of stagnation.
In terms of pricing, ADA's structure is still weak. The 200-day trend is clearly serving as overhead resistance, and it is still trading well below its long-term moving averages.
The chart displays a flattening phase, where the price has been compressing rather than trending, close to the $0.24-$0.25 range. This kind of behavior usually comes before a more significant move, though the direction is still unknown.
The crucial factor here is the volume spike. While increased participation frequently precedes volatility expansion, bullish continuation is not always implied.
Ratios in favor of bulls
Further examination of derivatives data reveals that major exchanges' long/short ratios are skewed in favor of longs, with some platforms displaying ratios higher than 2.0. That adds risk and shows a growing bullish bias among traders. If the market doesn't follow through, crowded long positioning may result in steep declines.
Data on futures flows adds an additional layer. Although there are brief spikes in positive inflows, the overall pattern indicates uneven capital commitment, with several periods of net outflows. This implies that despite the activity of traders, conviction is still low. Instead of settling on a direction, the market is searching for one.
This interpretation is supported by liquidation data. There is no dominant side being squeezed because both long and short liquidations are comparatively balanced. This is not indicative of a trending market, but rather of a range-bound one.
The most likely scenario for Cardano is continued consolidation. The first significant indication of strength would be a move above the $0.26-$0.28 region. Until then, rather than a verified trend reversal, the current activity appears more like a reactivation phase—capital returning to an old asset.
Dan Burgin
U.Today Editorial Team
