Cryptocurrency open interest volume has skyrocketed to record levels, bringing huge volatility to derivatives and spot markets. In particular, the current bullish momentum has fueled traders’ greed. Additionally, it encouraged long positions. This trend is gaining strength and many indicators suggest that a long squeeze may be coming for the most traded assets. Crypto analyst Vinicius Barbosa says that CoinGlass data gives a ‘long squeeze’ signal for 2 cryptocurrencies.
‘Long squeeze’ warning for leading cryptocurrency
Crypto journalist Colin Wu reported a record $33.94 billion increase in Bitcoin open contracts. This marks a new all-time high (ATH) in BTC, which is $10 billion more than the previous ATH of $23.04 billion. In this context, Bitcoin reached its previous ATH in November 2021, right at the end of the last cycle’s rally. Moreover, the funding rate of the leading cryptocurrency on major exchanges has also reached new highs. Therefore, such an inflated funding rate increases the threat of a ‘long squeeze’ due to extreme imbalances.
Liquidity pools on CoinGlass’ monthly liquidation heat map point to $50,000 as a possible pullback target in the event of a ‘long squeeze’. However, Bitcoin is forming price support at the previous ATH level and $69,000 as resistance.
Other ‘long squeeze’ warning for XRP
When looking at the liquidation status of other cryptocurrencies, XRP stands out as the second crypto with the highest probability of a ‘long squeeze’. However, liquidity pools are much smaller than Bitcoin’s. Therefore, this event is not certain. If market makers hunt these long positions, XRP may drop to the $0.5 price level.
In summary, Bitcoin and XRP were trading at $73,000 and $0.685 at the time of writing. Under favorable conditions, a ‘long squeeze’ could cause both cryptocurrencies to fall as low as $50,000 and $0.50.
market alert
However, it is very difficult to predict the crypto market. Because the market is quite volatile. This means that it is possible for these scenarios to change at any time. It is possible that positive news and developments will keep these projects strong this week. So it’s also possible that it will fuel higher prices rather than lower prices. Therefore, investors should trade carefully and avoid extreme positions in any direction.
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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