With trading volume rising by almost 78% over the last 24 hours, Cardano is exhibiting a rare surge in activity. This appears to be a strong bullish signal at first glance, but the underlying structure reveals a more complex picture.

ADA in tight price range

After a slight short-term recovery, the price of ADA is currently in the $0.25-$0.26 range. The asset formed a flat base that held through several retests after successfully bouncing off a local support zone. After a protracted decline, during which ADA lost a sizable amount of its value over the previous 90- and 180-day periods, there is now a stabilization phase.

Cardano is still below all major moving averages, including the 50, 100 and 200 EMA, despite the recent surge. This maintains the overall trend’s strong bearishness. Rather than being a confirmed reversal, the current move is more of a relief bounce.

The most significant change is the volume spike. While a 77.8% increase in trading activity suggests renewed interest, accumulation is not always implied. When examining derivatives data, liquidation metrics reveal a significant imbalance: longer-term liquidations continue to be skewed toward longs, while short liquidations predominate over shorter time frames.  

Futures flow surges

Another level is added by futures flow data. Although there are sporadic positive net inflows, they are erratic and counterbalanced by periods of significant outflows. Similar to other spot flows, there is no discernible directional bias. To put it simply, capital is flowing but not investing.

A small bullish bias among traders is indicated by the long/short ratio leaning above 1 on all major exchanges. However, since crowded long positioning frequently results in steep declines, this could become a risk factor if the market is unable to maintain its upward momentum.

The local resistance, slightly above the current price, is the important level for investors to keep an eye on. ADA may move toward a wider recovery zone with a clean break and consistent volume. This move runs the risk of fading into another lower high within the current downtrend if that does not happen.