The Key Takeaways
Cardano has recorded an inflow of liquidity totaling $48 million as Open Interests (OIs) soared to $1 billion during the day. The data on liquidity clusters suggests that the formation of a “bull trap” may be underway.
Cardano [ADA] The stock has been on a steady rise, with a gain of 2.87% over the last 24 hours. This brings its week-to-week increase to 26.86%.
This may not simply be a bullish continuation. The analysis indicates that ADA is on a path towards new highs. However, the underlying activity of the market suggests this could be a trap.
Inflows of liquidity reach a record high
Market liquidity has increased dramatically in the past 24 hour period, both for derivatives as well as spot markets.
In the derivatives segment, Open Interest—which measures the total value of unsettled Futures contracts—climbed over 3% to $1.21 billion, adding roughly $48 million to the market per CoinGlass.
CoinGlass
This marks the third time this year that OI has crossed the $1.2 billion level—previously in March, when ADA traded at $1.17, and for most of January, when price hovered around $1.
This liquidity is usually seen as bullish, and coincides with previous rallies over $1.2 billion that historically have preceded future upward movements.
Spot market shows also a very bullish outlook.
CoinGlass
Data from the Spot Exchange Netflow—which tracks net buying or selling pressure—indicates Over $14 Million in ADA has been purchased during the last week.
At press time, the token traded at $0.7522. This has contributed to ADA’s upward trend.
On-chain confirmation of modest inflow
On-chain indicators also confirm the bullish trends, though on a lesser scale.
Cardano’s Total Value Locked, or TVL, has increased over the last 24 hours.
The following is a list of DeFiLlamaCardano’s TVL now has $333 millions, reflecting a growing confidence in its network, and an optimistic outlook for the long term.
Source: DeFiLlama
TVL’s continued rise could support the current accumulation trend on both spot and derivative markets. This would help ADA to maintain its bullish position.
However, AMBCrypto’s analysis suggests this might be a setup—a potential bull trap—especially as ADA has started to move upward.
How to form a bull trap for ADA?
Chart data indicates that a bull trap could be forming, based on liquidation cluster zones—key areas where price is likely to gravitate.
If you look closely at the Liquidation Heat Map, it shows that there is limited liquidity before ADA’s present price. Clusters reach only $0.78.
CoinGlass
Below, the concentration of liquidity is large, reaching down to just $0.68.
ADA, which is currently trading at $0.75 in a bearish phase, will most likely aim for the $0.78 cluster before reversing to fill orders.
Press time is just $0.03 under the cluster of $0.78, which suggests that the move may trigger a bull trap classic and liquidate traders who are long.
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Source: ambcrypto.com
