The cryptocurrency market experienced a crash earlier in the week ahead of the Federal Reserve interest rate decision. However, following the non-farm employment data on May 3, it turned from a downward trend to an upward trend at the weekend. After days of short selling pressure, some cryptocurrencies show the potential to rise rapidly in the possibility of short selling pressure. Crypto analyst Vinicius Barbosa talks about ‘short squeeze’ potential for 2 altcoins in particular.
‘Short squeeze’ warning for 2 altcoins after Bitcoin!
cryptokoin.comAs you follow from , total crypto market cap hit a local bottom on May 1. However, it later recovered and has increased from this level to over $277 billion to date. On May 4, the index gained over 13% in three days. Thus, it reached the domestic highest value of $2.318 trillion.
However, previous fear, uncertainty, and doubt (FUD) led cryptocurrency traders to massively short Bitcoin (BTC) and other cryptocurrencies. This increased the likelihood of short selling events for BTC and targeted higher prices. In addition, two altcoins stand out in a similar situation with negative funding rates and accumulated short position liquidations.
‘Short squeeze’ warning for BNB Chain (BNB)
BNB’s current funding rate is a leading signal for a potential ‘short squeeze’ on the token. CoinGlass’ 30-day funding rate heat map shows this. Specifically, BNB short sellers are paying a 32.63% APR for long traders. It is possible that this may fuel short liquidations. Additionally, BNB has the sixth largest open interest in the derivatives market. This increases the relevance of the signal.
As for price targets, BNB has short liquidity pools between $600 and $630. The altcoin is currently trading at $590.
Second altcoin with ‘short squeeze’ potential: Bitcoin Cash (BCH)
Bitcoin Cash (BCH) has an even higher negative funding rate at 35.96%. Additionally, it is the 10th largest cryptocurrency ranked by open interest.
BCH’s liquidity pools are less concentrated than BNB’s. However, the coin’s current price is well below pending liquidations. Interestingly, there is a wide range of imbalances from $500 to over $700. This presents the potential for a rally that could result in gains of over 40% if Bitcoin Cash sees a ‘short squeeze’.
However, despite the above economic analysis, these cryptocurrencies may still experience negative price performance over the next few days. ‘Short squeeze’ technical indicators do not guarantee that the event will occur. As the market moves, things can change quickly. Therefore, investors should be cautious.
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.
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