This week Bitcoin (BTC) surged above $71,000 cryptocurrency It has the potential to take the market to new record levels. However, some cryptocurrencies still pose the risk of a short squeeze.
A short squeeze is a situation that occurs when short positions are closed quickly. When traders open short positions, they create pools of upside liquidity for market makers.
As Koinfinans.com reported, most cryptocurrencies appear to have the potential for a short squeeze in the short term.
Cardano (ADA) is one of the cryptocurrencies with short-term squeeze potential. ADA may attract investors who are tempted to open short positions due to its previous movements.
Ripple (XRP) similarly has short-term squeeze potential. A decline in XRP’s price could lead to some short liquidations and increase the likelihood of a long squeeze in the future.
A short-term squeeze for these two cryptocurrencies could give investors gains between 9.5% and 4.75%. However, as Bitcoin’s rise continues, these expectations may be exceeded.
However, there is also a positive atmosphere that supports the opening of long positions. This carries the potential for a long squeeze in the coming weeks.
Therefore, when speculating in the crypto market, investors should be careful and consider their risks well.
