After the harsh sales, the cryptocurrency market started to recover with Bitcoin halving. Crypto analyst Vinicius Barbosa says two cryptocurrencies that are among the highest open interest in the market currently have negative funding rates. The analyst says this also potentially means a buy signal.
These 2 cryptocurrencies are giving buy signals!
Negative funding rates mean that short sellers must pay interest to long traders as long as they keep their short positions open. Therefore, it is possible for these traders to face liquidation through ‘short squeeze’. Or they may be forced to close their positions, potentially affecting prices.
CoinGlass’ funding rates heat map dated April 23 provides some insights on this matter. When we sort the chart according to the cryptocurrencies with the highest open interest (OI), two cryptocurrencies attract attention. These also give a potential buying signal.
Bitcoin Cash (BCH) has ‘short squeeze’ potential
Bitcoin Cash (BCH) ranks as the seventh largest cryptocurrency by open interest. The popular Bitcoin (BTC) rival has open interest of approximately $337 million while having a market cap of $10 billion. When it comes to funding rates, BCH has the most significant negative APR among the top 10 cryptocurrencies according to OI. With a negative 10.61% funding rate, short sellers are likely to be under pressure to cover their positions.
Bitcoin Cash has seen an increase in upstream liquidity pools due to leveraged liquidation accumulations. This has triggered a ‘short squeeze’ warning for this week. So far, BCH has not yet experienced a ‘short squeeze’. This increased the potential of the negative funding rates buy signal above. At press time, BCH was trading at $510. However, the cryptocurrency has the potential to rise above $700.
In second place is Celestia (TIA)
The next buy signal comes from Celestia with optimal negative funding rates, around 24% APR. TIA ranks 27th by open interest. However, unlike Bitcoin Cash, TIA has a neutral liquidation heat map that weakens the buy signal even with the observed high funding rate. Meanwhile, previously Celestia issued a sell signal due to overbought conditions. This is a clear indication of how unpredictable the cryptocurrency market is.
The opinions and predictions in the article belong to the analyst and are definitely not investment advice. cryptokoin.com As, we strongly recommend that you do your own research before investing.
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