Whale Transactions Double as Altcoin Rises 10%: What’s Behind the Rally?

As Cardano (ADA) rose nearly 10% in two days, new futures positions and an increase in large transactions accompanied the price move, while Santiment said the rally could not be explained solely by short covering.

According to Santiment data for October 3-5, the dollar value of open interest in ADA rose about 25% to $304 million. This brought the total value of outstanding derivatives positions to its highest daily close since at least early April.

Open interest also rose by about 13% when measured in ADA. This difference shows that growth in dollar terms was not due solely to the token’s rising price; new positions were also opened in the market.

Short covering alone doesn’t explain the rally

Closing bearish positions can push prices higher as investors buy back assets. ADA’s funding rate turned positive after falling to its most negative level in a month on October 2, suggesting that such short covering may have contributed to the rally.

However, Santiment emphasizes that the decline in open interest suggested by some commentators does not appear in its daily closing data. While short covering reduces positions, growth in total open interest indicates that new leveraged trades also accompanied the rally.

Large transactions rise as social interest remains limited

On October 5, the number of ADA transactions worth more than $100,000 reached 413. That was about 2.2 times the weekday average from September 7 to October 2.

Social media volume that day, meanwhile, was only 1.1 times the level recorded during the same comparison period. Thus, the increase in large-transaction activity was markedly stronger than the rise in social media discussion.

The picture that emerged shows that ADA’s move was not solely the result of short positions being closed. The key detail highlighted by Santiment is that open interest in the market also grew as the price rose.