There has been a shift in sentiment in the cryptocurrency market, going from mostly bullish to mostly bearish in a matter of days. A $230 billion crash in 24 hours liquidated more than 240,000 investors who held long positions worth more than $500 million. However, some cryptocurrencies were subject to overselling. Crypto analyst Vinicius Barbosa draws attention to 3 cryptocurrencies with high ‘short squeeze’ potential.
Data shows ‘short squeeze’ potential for three cryptocurrencies
Cryptocurrencies have seen a significant increase in the volume of short positions. Thus, it has now created imbalances for a ‘short squeeze’ threat. If short positions remain dominated by Bitcoin short sellers, they could be the next victim of massive liquidations. However, such a situation is likely to create opportunities for savvy traders who know where to look. Therefore, we consulted liquidation data from CoinGlass. The data shows three cryptocurrencies likely to experience a ‘short squeeze’.
As can be seen, opening leveraged short positions exposes traders to liquidations. It also encourages the market to go in the opposite direction to which most speculators tend. Meanwhile, the cryptocurrency market is highly volatile. Professional traders use this structure to increase their profits. Therefore, caution is required when speculating and trading cryptocurrencies.
For Bitcoin (BTC) short squeeze warning
Bitcoin is the first cryptocurrency to trigger the short squeeze alert, with liquidity currently accumulating to the upside. In particular, CoinGlass’s weekly chart shows concentrated short seller liquidations at $74,346, which could become a target. However, there are smaller liquidity pools at other levels. In case of a short squeeze, it is possible for the price to rise above $75,000.
BTC weekly liquidation heat map. Source: CoinGlass
Additionally, MartyParty identified $8.1 billion in liquidations at $75,500. This makes this an area to consider.
Second ranked cryptocurrency: Litecoin (LTC)
The second crypto most likely to see a short squeeze is Litecoin, which has a relatively high short position accumulation. Market makers can first target a liquidity pool above $95. Then, meaningful liquidations await the bloodbath in the $100 region, which plays an important psychological resistance role.
Leading altcoin Ethereum (ETH) is also a short squeeze candidate
Meanwhile, Ethereum also has some pumping potential with many liquidity pools on the upside. However, the liquidation volume of ETH is proportionally smaller compared to its market value and past liquidations. However, some price levels are marked by higher leverage margin calls. Accordingly, $3,600, $3,700 and above $4,000 are possible targets for the short squeeze.
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!