in the last few days cryptocurrency There has been a major shift in sentiment in the market. While prices mostly rose, they faced a sudden decline. This sudden change caused a loss of $230 billion in 24 hours, and the long positions of more than 240,000 investors were liquidated.
This led to an increase in short position volume and now an imbalance has occurred in the market. If Bitcoin If short sellers continue to dominate, large-scale liquidations may be inevitable. However, this may present opportunities for some experienced traders. As we reported as Koinfinans.com, according to the liquidation data on CoinGlass, three cryptocurrencies that are likely to experience a short selling squeeze stand out.
Short Squeeze Warning for Bitcoin (BTC)
Bitcoin (BTC) is currently showing a brief warning signal with liquidity piling up. The weekly chart of CoinGlass shows that a significant pool of liquidity has accumulated at $74,346. There are also small pools of liquidity at these levels, which could lead to a price increase above $75,000. Additionally, it appears that MartyParty detected $8.1 billion in liquidation at the $75,500 level, which indicates an area that should be taken into consideration.
Litecoin (LTC)
Litecoin (LTC), the second most likely cryptocurrency, has a proportionally high accumulation of short positions. Market makers can primarily target a liquidity pool above $95. Then, liquidations are expected in the $100 region, which is an important psychological resistance.
Ethereum (ETH)
Ethereum (ETH) also has upside liquidity potential. However, ETH’s liquidation volume is proportionally smaller than its market cap and history. Still, some price levels such as $3,600, $3,700, and $4,000 could trigger a short squeeze.
As can be seen, opening leveraged short positions can expose traders to the risk of liquidation and encourage them to go against the market. Since the cryptocurrency market is extremely volatile, it is important to be careful when making speculative transactions. Professional traders can take advantage of this volatility, but must consider the high risk.
