Cardano & Ethereum Flash Bullish Signals — Is a Short Squeeze Coming?

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• ADA is holding key support with a potential 21% upside if momentum continues.
  
• ETH reclaimed $2,000 after a liquidation-driven reset, signaling early recovery.
  
• Whale accumulation and short liquidations are driving short-term bullish pressure.

Crypto markets are showing early signs of stabilization, with Cardano (ADA) and Ethereum (ETH) attempting to recover after recent selling pressure. Both assets are now at critical levels where trader positioning, liquidity, and momentum could determine the next move.

Cardano Eyes Rebound as Short Liquidations Loom

Cardano (ADA) is attempting to snap a three-day losing streak, posting a modest 2.5% gain and trading near $0.25. The move comes alongside a notable increase in market activity, with trading volume jumping over 30% to $445 million—an early sign of renewed participation.

Derivatives data highlights a key dynamic: nearly $3.77 million in short positions are close to liquidation. This creates upward pressure, as traders betting against ADA may be forced to buy back into the market if prices rise further.

Key levels to watch include:

• $0.236 support, which has held firm
• $0.252 resistance, a breakout level that could trigger momentum

The long/short ratio has climbed to 1.16, reflecting a growing bullish bias among traders. If ADA clears resistance, it could quickly test higher levels.

Whale Accumulation Signals Confidence

On-chain data adds another layer to the story. Large holders—often referred to as whales—have accumulated roughly 230 million ADA in recent days. This accumulation occurred near the $0.235 support zone, suggesting that major players view current prices as attractive.

Source: TradingView
Technically, ADA is showing signs of repeating a historical pattern. If support holds, the asset could rally as much as 21% toward $0.30. However, this outlook depends on maintaining current levels—any break below support would weaken the bullish case.

Momentum indicators remain mixed. The RSI is still below neutral, indicating lingering bearish pressure, but it is trending upward, hinting at a possible shift.

Ethereum Reclaims $2,000 as Market Structure Improves

Ethereum has also regained strength, climbing back above the $2,000 mark after a brief breakdown. The price is now holding near $2,060, signaling that buyers stepped in aggressively at lower levels.

This recovery was driven in part by a liquidation flush between $1,950 and $2,050, where leveraged positions were wiped out. Once that selling pressure cleared, the market rebounded, with short positions closing and adding fuel to the upside.

Momentum indicators show a cautiously optimistic picture:

• RSI near 56 suggests room for further gains
• Weak capital inflows indicate demand is still limited

Also Read: Cardano’s ADA Hits Swiss Supermarkets: Can the Price Sustain?

For Ethereum, the next test lies between $2,100 and $2,150, a previous resistance zone. A strong breakout could confirm a broader recovery, while rejection may signal lingering selling pressure.

For Cardano, holding above $0.235 remains critical. A sustained move higher could trigger a short squeeze and extend gains, but failure at resistance may lead to consolidation.

Both Cardano and Ethereum are entering a pivotal phase. Rising trading activity, liquidation pressure, and whale accumulation suggest improving sentiment. However, underlying demand remains uneven, meaning these recoveries could still face resistance. The coming sessions will be key in determining whether this is the start of a sustained uptrend—or just a temporary bounce.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.