- The potential for a significant rally in certain altcoins, specifically Cardano (ADA), Chiliz (CHZ), and Fantom (FTM), is on the rise, according to crypto analytics firm Santiment.
- Santiment has identified increasing negative funding rates for these altcoins, suggesting a heightened probability of short squeezes occurring.
- “When funding rates go heavily negative on prominent exchanges, it sets the stage for potential short squeeze scenarios,” Santiment reports.
Ethereum competitor Cardano (ADA) and other altcoins like Chiliz (CHZ) and Fantom (FTM) are poised for a potential rally due to improving market conditions and trader sentiment.
Cardano (ADA), Chiliz (CHZ), and Fantom (FTM) Show Potential for Short Squeeze
Santiment, a leading crypto analytics provider, has spotlighted ADA, CHZ, and FTM as altcoins with rising negative funding rates, indicating that traders are heavily shorting these assets. This situation, reminiscent of similar conditions in April and May, sets the stage for short squeezes, where traders betting against the market might be forced to cover their positions, driving prices up.
Understanding Negative Funding Rates and Short Squeezes
Funding rates in the perpetual swaps market reflect trader sentiment and the ratio of short to long positions. Negative funding rates imply that short traders are currently paying long traders, a scenario that often precedes short squeezes. A short squeeze occurs when short sellers are compelled to buy back assets at higher prices, leading to a rapid price increase.
Current Market Performance of ADA, CHZ, and FTM
As of the latest data, Cardano is trading at $0.39, a decline of over 5% in the past 24 hours. Meanwhile, Chiliz stands at $0.0663, down 5.7% for the day, and Fantom is priced at $0.43, marking an 11% drop. Despite these declines, the negative funding rates suggest a potential turnaround.
Increased Social Media Chatter Indicates Growing Interest
Santiment notes a surge in discussions about these digital assets on platforms like Telegram, Reddit, and X, indicating a growing interest and speculation about their potential rally. Increased social chatter often correlates with heightened trading activity and can be an early indicator of market moves.
Conclusion
Given the negative funding rates and rising social media engagement, Cardano (ADA), Chiliz (CHZ), and Fantom (FTM) might experience significant price movements due to short squeezes. Traders and investors should monitor these metrics closely, as they could signal notable opportunities in the near future.
