Most cryptocurrencies have recently experienced a ‘short squeeze’ following the bullish trend in the market. Cryptocurrencies such as Bitcoin and Curve, which had previously signaled, made an upward move. Crypto expert Vinicius Barbosa sees similar potential for two altcoins this week.
FIL and DOGE have ‘short squeeze’ potential
‘Short squeeze’ occurs when bearish cryptocurrency traders dominate the market, open short positions and create high upward liquidity. As these positions are liquidated, prices rise. It also triggers more liquidations with each tier upward. In particular, there aren’t many cryptocurrencies left with potential liquidity to go through a ‘short squeeze’ this week.
In this context, Filecoin (FIL) is the token most relevant for meaningful upward liquidations. Additionally, Dogecoin (DOGE) stands out as the cryptocurrency with the most likely ‘short squeeze’ potential on a higher time frame. However, it is important to understand that the higher the time frame, the more easily this scenario can change over time.
‘Short squeeze’ warning for Altcoin Filecoin (FIL)
First, according to CoinGlass’ 3-day and weekly heatmaps, Filecoin is the only cryptocurrency with meaningful short open interest. If it reaches these liquidations, it is possible for FIL to rise up to $5.5 this week. Thus, it gains approximately 10% from the current price of $5.
‘Short squeeze’ warning for DOGE on higher time frames
Then, Dogecoin accumulated enough open interest in short positions to experience a ‘short squeeze’ in February. Specifically, this concentrated liquidity pool is targeting $0.0948 in the monthly time frame. This would represent a 17% increase for the leading meme coin. It will also penalize short sellers of DOGE. However, on Dogecoin’s lower time frames, some fresh liquidity is being recorded on the downside from long traders. It is also possible for this to encounter liquidation before a pump.
The cryptocurrency market changes rapidly and is unpredictable. Similarly, short-squeeze indicators do not guarantee that these events will actually occur. It is possible for short positions to increase for different reasons, including weak fundamentals or bearish news regarding the altcoin project. Therefore, investors should be cautious. They also need to consider the entire context around each potential cryptocurrency.
The opinions and predictions in the article belong to the expert and are definitely not investment advice. cryptokoin.com We strongly recommend that you do your own research before investing.
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