An analysis said Cardano (ADA)'s recent rise was a rebound accompanied not only by short-position liquidations but also by an increase in new leveraged positions.

On Oct. 6, blockchain media outlet The Crypto Basic reported that on-chain analytics firm Santiment focused on the fact that ADA's price and open interest both rose.

ADA rose about 11 percent, from about $0.244 on Oct. 3 to about $0.270 on Oct. 5. Over the same period, dollar-denominated open interest increased about 25 percent to $304 million. That was the highest daily close since at least early April.

Santiment also pointed to open interest rising alongside prices on a 6-hour chart. A short squeeze is when liquidations of short positions that incur losses due to price gains fuel further rises. Open interest often falls in that process, making it difficult to explain this rebound only through short liquidations.

Dollar-denominated open interest also reflects the impact of price gains, but it rose about 13 percent over the same period when measured in the number of ADA. That means not only prices rose but outstanding positions themselves increased.

It does not fully rule out the possibility of a short squeeze. Funding rates posted the most negative level in the past month on Oct. 2, then turned positive as ADA prices rose. Some short positions may have been liquidated or voluntarily closed in that process, but the overall increase in open interest suggests new positions were also built.

On-chain data showed an increase in large trades. On Oct. 5, there were 413 transactions of $100,000 or more, about 2.2 times the weekday average from Sept. 7 to Oct. 2. By contrast, social media activity, which indicates online mentions, was about 1.1 times the comparison baseline. Large-scale on-chain transactions increased more noticeably than broad public interest.

Ultimately, the recent rebound is characterised by an expansion of derivatives positions alongside the price rise. Whether leverage that has built up will increase liquidation pressure during a price correction, along with whether prices rise further, remains a key variable.

Was $ADA’s rally really a short squeeze? Some coverage said so, pointing to falling open interest. Santiment’s daily closes show the opposite. $ADA rose about 10 percent from Oct. 3 to Oct. 5. Open interest rose about 25 percent over the same two days, to $304 million, its highest daily close since at least early April. Measured in coins rather than dollars, open interest still rose about 13 percent, so this is new positioning, not just a higher price. Whale transactions ($100,000+) hit 413 on Oct. 5, about 2.2 times the Sept. 7 to Oct. 2 weekday average. Social volume on Oct. 5 sat at about 1.1 times that same baseline. Some short covering likely helped: funding hit its most negative reading of the past month on Oct. 2, then flipped positive. But covering shrinks open interest, it doesn’t grow it. The headline said squeeze, the open interest says leverage. Explore ADA open interest in Sanbase: https://t.co/LOdcbV2HOB