After a good March, cryptocurrency investors turned their focus to April. In this context, investors are looking for insight on cryptocurrencies that have the potential to skyrocket. Among valuable indicators, open positions in the derivatives market indicate possible short selling in the coming weeks. Crypto analyst Vinicius Barbosa draws attention to 2 altcoins with high ‘short squeeze’ potential for April.
CoinGlass detected short selling potential for 2 cryptocurrencies
In particular, the current dominance of short positions could trigger massive liquidations in certain cryptocurrencies, increasing their prices proportionately. This is because investors agree on a liquidation price to open a short position against a cryptocurrency they are bearish about. If the underlying asset reaches the liquidation price, the position is closed by repurchasing the asset. CoinGlass data detected short selling potential for two cryptocurrencies in April.
In first place is the leading altcoin Ethereum (ETH)
Notably, total open interest in Ethereum (ETH) futures remains at record levels at over $13 billion. This created corresponding liquidity pools at two different price levels. First, there are liquidations in the $3,700 price zone and then above $4,100. Reaching these targets has the potential to trigger a ‘short squeeze’ and pump the price upwards.
Therefore, it is possible for ETH investors to gain between 2.5% and approximately 14% from the current $3,600.
There is also ‘short squeeze’ potential for XRP
The 24-hour short position volume for XRP is $344.60 million. This dominates XRP’s open interest at 52.56%. The token was trading at $0.627 at the time of writing. Therefore, it is on the verge of further volatility. Interestingly, XRP has liquidity pools in both directions. The closest ones for a possible long squeeze are on the lower side. These traders could face sudden liquidation if Ripple’s April sell-off sparks a flash crash.
However, there are also short liquidations on the upside of the monthly chart, with emphasis on the $0.71 region. This is consistent with technical indicators pointing to a possible bear trend break.
Despite the potential involved, futures liquidations by short sellers do not guarantee that a short squeeze will occur. The cryptocurrency market is extremely volatile and changes drastically every minute.
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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