Looking at the Cardano chart again, I see some interesting signals overlapping. Over the past year, the average loss for people who bought has been 43%, and at the same time, the short positions in the derivatives market are at their highest in three years. The fact that these two are appearing together is quite rare.

Looking at the funding rate data, it shows that short traders are heavily concentrated. It’s at its most negative level since June 2023. When shorts are extremely concentrated like this, there’s a high chance of a counter-move. A short squeeze, in other words. About three years ago, there was a similar situation, and ADA rose about 300% over 18 months from around $0.25.

Of course, that doesn’t mean the current situation is exactly the same as back then. The macro environment isn’t favorable, and the growth of the Cardano ecosystem isn’t meeting expectations. But just based on current positioning, with shorts so heavily concentrated and the average holder at a -43% loss, the next move could surprise most people. ADA is currently trading near $0.25, and it’s hard to ignore the possibility that a catalyst could trigger a sudden short squeeze.