Cardano has once again reached an interesting situation. Over the past year, the average holder has an unrealized loss of 43%, and the derivatives market is also showing an abnormally high concentration of shorts. Usually, something tends to happen during these times.

Looking at the MVRV indicator, Cardano is in what’s called the "opportunity zone," a deep position. This means that those who were panicking and selling have already sold, and only those accepting losses or HODLers remain. Since selling pressure is decreasing, the market is ready for a rebound if a catalyst appears.

The derivatives funding rate is also at its lowest since June 2023. Shorts are unusually high. If prices start rising cascade-like from here, it could trigger a chain reaction of short liquidations, pushing prices even higher. By cascade, I mean a chain reaction where one liquidation causes the next.

In mid-2023, similar signals appeared, and from around $0.25, the price increased about 300% over 18 months. However, the same outcome isn’t guaranteed this time. The macro environment is poor, and ecosystem growth has slowed. But the bottom signal is driven by positioning, not fundamentals. Currently, Cardano’s positioning is such that it could catch most traders off guard.

At the moment, ADA is trading around $0.24, down more than 8% weekly. Bitcoin is also trying to break above $76,000 but hasn’t yet made a true breakout. It’s during these times that the distortion in positioning could lead to something unexpected.