While the cryptocurrency market triggers its rise led by Bitcoin, an ‘altcoin season’ is experienced as BTC leaves the scene. While many projects are currently recording balanced ‘short/long’ data, expectations are for a ‘short squeeze’.
According to data from CoinGlass dated December 8, there are two altcoins with a slightly higher weighting towards short positions. The dominance of short sellers generally indicates bearish sentiment, but it also fosters attractive upside liquidity for short sellers.
Binance Coin (BNB) and Bitcoin Cash (BCH) futures data are showing a weighting towards short positions compared to long positions on both the 12- and 24-hour time frames. This is one of the important details that increases the possibility of a short squeeze.
Binance Coin (BNB) Gives Signals for Short Squeeze
Uncertainty on cryptocurrency exchange Binance continues to affect BNB’s performance. This effect can be observed in a dominant bearish indicator for open short positions in derivatives.
BinanceCoin As of press time, it is trading at $234.57 and there is a 52% short position dominance. There are short positions of $194.05 million and $331.90 million in the last 12 and 24 hours, respectively.
Bitcoin Cash Also Attracts Attention
BitcoinCash is another highly short-sold altcoin. For this reason, it has frequently experienced aggressive short squeezes in the past and continues to have a tendency to reoccur under the right conditions.
Interestingly, short positions worth $150.43 million were opened in the last 24 hours. $66.23 million of this amount was realized in the last 12 hours and constitutes 53.73% of the open positions in this time period.
A short squeeze occurs when these bearish positions are liquidated, encountering an increase in demand and price. Increased demand causes high volumes of buy orders to liquidate exchange books, pumping the price and triggering derivative contracts to liquidate, pushing the price even higher.
However, there is no guarantee that there will be a short-term squeeze in these cryptocurrencies. Crypto investors must do their own research and consider other data to make profitable financial decisions.