- In the midst of the short-term downtrend in the crypto market since March, those who short-sell cryptocurrencies have profited over the last two months. In contrast, some tokens have high ‘short squeeze’ potential for the coming week.
- Crypto analyst Vinicius Barbosa has identified two altcoins showing signs of surging.
- Positive divergences indicating a reversal of the trend among price charts and key technical indicators have emerged, fueling typical ‘short squeeze’ warnings.
Amidst a short-term downtrend in the crypto market, two altcoins show potential for a ‘short squeeze’ in the coming week, according to crypto analyst Vinicius Barbosa.
Potential First Movers in the Crypto Market
These signs include negative funding rates, increases in short position volume, and accumulation of leverage liquidation at higher levels. Moreover, the reopening of doors for offshore crypto exchanges in India has increased optimism, confirming the market potential for the coming weeks from a regulatory and fundamental perspective. As a result, cryptocurrencies with significant imbalances in the derivatives market could be the first to surge.
First Altcoin with High ‘Short Squeeze’ Potential: Avalanche (AVAX)
Avalanche (AVAX) is one of the cryptocurrencies likely to experience a ‘short squeeze’ and potentially see a rapid increase in price in the coming week. This is particularly the case when considering the relevant weekly open interest for short positions among crypto traders. This situation has increased negative funding rates for AVAX. Furthermore, short-sellers are paying a 5.8% APR to those taking long positions. Data from CoinGlass confirms this situation.
Bitcoin Cash (BCH) Also Shows Rapid Rise Potential
Similarly, Bitcoin Cash (BCH) stands out with a notable negative funding rate of 10.06%. Additionally, BCH has the 10th highest open interest in the market. After reaching the previous liquidation target of $500 in two short-term events, BCH could rise to as much as $625. Bitcoin Cash is currently trading at $430, which means gains of between 16% to 45%.
Conclusion
However, other factors could prevent the predicted trend reversal and ‘short squeeze’ for AVAX, BCH, or other cryptocurrencies. Investors need to be cautious when opening leveraged positions and speculating in this volatile environment. The views and predictions in this article belong to the analyst and are not investment advice. As CoinOtag, we recommend doing your research before investing.
