The dominance of Bitcoin (BTC) in the crypto market has approached 55 percent. Thus, he returned to local resistance. In this process, altcoins lost strength against the leading cryptocurrency. Faced with this situation, crypto traders preferred to open short positions against cryptocurrencies that could soon skyrocket in a ‘short squeeze’. Crypto analyst Vinicius Barbosa shares 2 altcoin projects with high ‘short squeeze’ potential this week.
Bitcoin Dominance Index is rising!
cryptokoin.comAs you’ve seen from , cryptocurrencies are resilient to headwinds. In particular, the leading crypto Bitcoin is struggling around 70 thousand dollars, even though it is losing altitude. The Bitcoin Dominance Index (BTC.D) is currently above the 50-day exponential moving average (EMA) at 54.64%. BTC.D is approaching a local top at 55.26% as BTC gains strength, mostly against altcoins that traders are increasingly shorting.
As a result, some of these cryptocurrencies are accumulating their respective liquidation pools upward. So, they could potentially trigger a ‘short squeeze’ next week. Two altcoins with this potential stand out.
‘The first altcoin with short squeeze potential: Cardano (ADA)
Cardano (ADA) lost its position in the top 10 cryptocurrencies following recent movements. Notably, he accumulated a large short position after that. In this context, ADA has the potential to surge from the current $0.58 to above $0.68. This represents a potential 17.25% increase in price if short sellers are liquidated.
Additionally, futures contracts open interest for Cardano remains at significant historical levels with commensurately low prices. According to CoinGlass data as of April 12, there is approximately $400 million in these contracts.
Popular meme coin Dogecoin (DOGE) may also skyrocket!
Another altcoin with historically high open interest is Dogecoin (DOGE). The popular meme coin has over $1.55 billion in open interest in the derivatives market. Therefore, this also indicates high volatility ahead.
Interestingly, most of these consist of short positions opened in a similar price range. Mass short selling created a concentrated pool of liquidity at $0.21. Therefore, it is possible for market makers to target this pool for a ‘short squeeze’.
Dogecoin was trading at $0.194 at the time of writing. Therefore, a run into these liquidations would reward DOGE traders with approximately 6% gains.
However, having accumulated liquidity is not enough to ignite the ‘short squeeze’. These trading events result from a combination of factors. It also often requires underlying motivation, such as bullish news, as a trigger. Therefore, it is important for traders and investors to follow news and developments regarding these cryptocurrencies when making financial decisions.
The opinions and predictions in the article belong to the analysts and are definitely not investment advice. cryptokoin.com We strongly recommend that you do your own research before investing.
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