Bitcoin rose above $72,000 this week. This showed that it has the potential to take the cryptocurrency market to record levels. According to crypto analyst Vinicius Barbosa, despite this positive outlook, there is still a possibility of a ‘short squeeze’ for some altcoin projects. In this context, the analyst shares 2 altcoins with ‘short squeeze’ potential.
CoinGlass shows ‘short squeeze’ possibility for these 2 altcoins
Essentially, ‘short squeeze’ is the opposite of ‘long squeeze’. It occurs when short positions are liquidated quickly. When traders open short positions, they create pools of upside liquidity that can become targets for whales and market makers. If the price rises rapidly and reaches these liquidity pools, the platform forces these positions to be closed through liquidation. Closings force investors to buy the underlying asset, creating more demand. CoinGlass data shows that most cryptocurrencies have short-term bearish potential in the short term. However, it reveals that there is ‘short squeeze’ potential for 2 altcoins.
First ranked altcoin: Cardano (ADA)
Cardano is one of the few top cryptocurrencies with strong potential for ‘short squeeze’. This is because it has meaningful liquidity pools on the upside, although not as much on the upside. In particular, ADA had a ‘long squeeze’ last week. Bullish traders were liquidated with a massive decline to the $0.55 region. A similar event against bear traders could push Cardano’s token above $0.8.
Essentially, the previous move likely encouraged cryptocurrency investors to open short positions. This movement continues and $555.86 million worth of short positions have been opened in the last 24 hours. ADA, which dominates 52.95% of Cardano’s daily volume in the derivatives market, is traded at $0.732.
Ripple (XRP) ranks second
Similarly, XRP is one of the few cryptocurrencies with remaining liquidity for the ‘short squeeze’, although it is significantly lower than Cardano. In this regard, the XRP token has some relevant short liquidations from its current price towards the $0.66 level.
However, the most significant concentration of open interest is downward. Unlike ADA, the collapse of XRP was not enough to liquidate a large liquidity pool to $0.51. Therefore, this region still represents a possible target for the coming days. However, a short drop to $0.66 could encourage more long positions, increasing the pool of downside liquidity and the likelihood of a future ‘long squeeze’ on a sell-off to $0.5. Currently, XRP is trading just above $0.63.
In summary, a ‘short squeeze’ for these two altcoins could result in gains of 9.5% and 4.75% for ADA and XRP respectively. However, if Bitcoin continues to rise, it is possible for both tokens to surpass these expectations.
The opinions and predictions in the article belong to the analyst and are definitely not investment advice. cryptokoin.com We strongly recommend that you do your own research before investing.
To be informed about the latest developments, follow us twitter‘in, Facebookin and InstagramFollow on and Telegram And YouTube Join our channel!