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Motivation As data storage challenges grow and existing technologies approach their limits, synthetic DNA emerges as a promising storage solution due to its remarkable density and durability advantages. While cost remains a concern, emerging sequencing and synthetic technologies aim to mitigate it, yet introduce challenges such as errors in the storage and retrieval process. One crucial task in a DNA storage system is clustering numerous DNA reads into groups that represent the original input strands. Results In this paper, we review different methods for evaluating clustering algorithms and introduce a novel clustering algorithm for DNA storage systems, named Gradual Hash-based clustering (GradHC). The primary strength of GradHC lies in its capability to cluster with excellent accuracy various types of designs, including varying strand lengths, cluster sizes (including extremely small clusters), and different error ranges. Benchmark analysis demonstrates that GradHC is significantly more stable and robust than other clustering algorithms previously proposed for DNA storage, while also producing highly reliable clustering results. Availability and implementation https://github.com/bensdvir/GradHC. [ABSTRACT FROM AUTHOR]