Cardano (ADA) is showing signs of a potential turnaround as two contrarian indicators flash simultaneously. Current data reveals that average holders who bought ADA in the past year are facing an average loss of 43%, placing the token in an “opportunity zone” that historically precedes price recoveries. Meanwhile, derivatives traders have adopted the most aggressive short positions seen in nearly three years, with ADA funding rates hitting their most negative since June 2023.
This combination of deep holder losses and a crowded short market suggests a setup ripe for a potential short squeeze, where any positive price movement could trigger a cascade of buybacks from short sellers. Historically, such conditions have led to significant rallies, as seen in mid-2023 when ADA surged approximately 300% following similar signals.
Market professionals should monitor ADA closely, as the current positioning may lead to unexpected price movements, especially given the token’s recent trading level around $0.26.
Source: coindesk.com