Where does the capacitor go again?
That is the capacitor will dampen the 0.005v fluctuation that I'm trying to measure?
But how large should the capacitor be
Keep your ref at 5V. Connect the incoming signal to a capacitor, then that to an Op-amp. Set the op-amp up so that it swings around a 2.5V virtual ground, and enough amplification so your tiny variations are now around +/- 2V.Simplest arrangement is an inverting amplifier. 50/50 voltage divider on to non-inverting. Signal via capacitor and resistor Rin to inverting. Output through resistor Rf back to inverting. The gain is -(Rf/Rin).Note that the values then sampled by the ADC will be backwards, so subtract them from 1024 to get the real values.