Cryptocurrency investors and traders are trying to navigate through a cloud of fog. Because the systemic risk created by the collapse of FTX, the increase in regulatory pressures, and the weariness caused by the long winter market make market players despair. However, an on-chain analytics firm says that three altcoin projects are giving bullish signals. The firm attributes the reason for this to the extreme bearish trend of the traders in the market.
Traders are betting on the fall of three altcoin projects!
cryptocoin.comAs you follow, the crypto market was hit hard by the collapse of Terra in the bear market. The market was going to heal the wounds of this just when it was knocked down with FTX this time. In this environment, altcoin prices are seeing sharp drops, while traders are betting on further declines. So is there no limit to this? Santiment, a leading on-chain analytics firm, reveals that traders are betting heavily on the continued decline of Polkadot (DOT), Stellar (XLM), and Monero (XMR). That’s why analytics firm draws attention to a ‘short squeeze’ situation. In this context, Santiment makes the following statement:
Since the weekend started, traders have been betting against several altcoin projects to profit from their declines. Polkadot, Monero and Stellar have large short positions on exchanges. Typically, this increases the chances of liquidation and price increases.
At press time, DOT is trading at $5.29 and XLM at $0.08. Also, the two altcoin projects are trending sideways with a slight decline on the day. XMR is changing hands at $151.48, up 1% on a daily basis.
“This increases the likelihood of an altcoin price bottoming out”
According to Santiment, market participants are showing notable signs of capitulation and negativity. In such an environment, traders are largely shorting three altcoin projects. Based on this, the analytics firm makes the following assessment:
Mentions of ‘dead’ and ‘dead cryptocurrency’ jumped to all-time highs in late November. Also, this is still high historically. This traditionally increases the likelihood of a crypto price bottoming out.
BTC and ETH supply on exchanges is at the bottom!
The analytics firm is also looking at leading crypto Bitcoin (BTC) and leading altcoin Ethereum (ETH). Santiment notes that the supply of BTC and ETH on crypto exchanges is at a four-year low. He explains the effect of this situation as follows:
BTC and ETH continue to see their current respective supplies dwindle. Now both have broken their lowest levels in four years. This means a lower risk of selling. Meanwhile, Tether has a high stock market supply, which means higher real-time purchasing power.
At press time, Bitcoin was trading at $17,179 on a daily basis, unchanged. Ethereum, on the other hand, is slightly up at $1,274.67.
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