cryptocurrency Details such as negative funding rates in the market, increases in short position volume and accumulation of higher levels of leverage liquidation increase the likelihood of a “short squeeze” occurring next week.
Avalanche, is one of the cryptocurrencies that is likely to experience a short squeeze next week and its price will potentially rise rapidly. This situation draws attention especially in weekly open interest rates.
Recent developments have increased negative funding rates for AVAX, with short sellers paying a 5.8% APR to long positions.
Notably, Avalanche’s 1-month liquidation heat map shows a critical liquidity pool of $40 per token, which could become a short-term target. A rally to this level would reward AVAX traders with rapid gains of over 17% from current prices of $34.
Similarly, Bitcoin Cash has a significant negative funding rate of 10.06% and the 10th highest open interest in the market.
BCH has the potential to rise as high as $625 after reaching the previous liquidation target of $500 in two short-term events. Considering Bitcoin Cash is currently trading at $430, this represents a gain of between 16% and 45%.
However, other factors may prevent a predicted trend reversal and short squeezes for AVAX, BCH, or other cryptocurrencies. Investors should be careful when opening leveraged positions and speculating in this volatile environment.
