- The cryptocurrency market experienced a downturn ahead of the Federal Reserve’s interest rate decision during the week, but rebounded over the weekend following the release of non-farm payroll data on May 3rd.
- Following days of sustained short-selling pressure, some cryptocurrencies are showing potential for rapid growth within the possibility of short-selling pressure.
- Crypto analyst Vinicius Barbosa specifically mentions the ‘short squeeze’ potential for 2 altcoins.
Discover the potential ‘short squeeze’ for two altcoins in the cryptocurrency market, as the market rebounds from a downturn. Learn about the factors contributing to this potential and what it could mean for investors.
Warning of ‘short squeeze’ for 2 altcoins after Bitcoin
As you may have followed from CoinOtag, the total crypto market value made a local bottom on May 1st. However, it later recovered and has since increased by over $277 billion from this level. The index recorded an increase of over 13% within three days on May 4th, reaching a local high of $2.318 trillion. The previous fear, uncertainty, and doubt (FUD) led cryptocurrency traders to largely short Bitcoin (BTC) and other cryptocurrencies. This increased the possibility of short-selling events for BTC and targeted higher prices. Additionally, two altcoins stand out with negative funding rates and accumulated short position liquidations.
‘Short squeeze’ warning for BNB Chain (BNB)
The current funding rate of BNB is a leading signal for a potential ‘short squeeze’ for the token. CoinGlass’s 30-day funding rate heat map shows this. Specifically, BNB short sellers are paying an APR of 32.63% for long position traders. This could potentially fuel short liquidations. BNB also has the sixth largest open interest in the derivatives market, increasing the relevance of the signal. As for price targets, BNB has short position liquidity pools between $600 and $630. The altcoin is currently trading at the $590 level.
Second ‘short squeeze’ potential altcoin: Bitcoin Cash (BCH)
Bitcoin Cash (BCH) has an even higher negative funding rate of 35.96%. It is also ranked as the 10th largest cryptocurrency by open interest. BCH’s liquidity pools are less intense than BNB’s. However, the coin’s current price is far below pending liquidations. Interestingly, there are imbalances over a wide range from $500 to over $700. This situation offers a potential for a surge that could result in gains of over 40% if Bitcoin Cash sees a ‘short squeeze’.
Conclusion
Despite the above economic analysis, these cryptocurrencies may still exhibit negative price performance in the next few days. ‘Short squeeze’ technical indicators do not guarantee the event will occur. Everything can change rapidly as the market moves. Therefore, investors should be cautious. The views and predictions in the article belong to the analyst and are definitely not investment advice. We recommend that you do your own research before investing.
