January 13, 2025
#Blockchain

Analyst: These 2 Altcoins Are Waiting for an Opportunity to Surge to These Levels!

The cryptocurrency market suffered a slump during the week ahead of the Federal Reserve interest rate decision. However, it turned from bearish to bullish at the end of the week following the non-farm payrolls data on May 3. After days of short-selling pressure, some cryptocurrencies are showing the potential to rally quickly on the possibility of short-selling pressure. Crypto analyst Vinicius Barbosa talks about the ‘short squeeze’ potential for 2 altcoins in particular.

‘Short squeeze’ warning for 2 altcoins after Bitcoin!

Cryptocoin.comAs you may know, the total crypto market capitalization made a local low on May 1st. However, it has since recovered and has increased by over $277 billion from that level to date. On May 4, the index recorded an increase of over 13% in three days. Thus, it reached a local high of $2.318 trillion.

Total Crypto Market Cap Index, daily chart. Source: TradingView

However, previous fear, uncertainty and doubt (FUD) led cryptocurrency traders to heavily short Bitcoin (BTC) and other cryptocurrencies. This increased the likelihood of short selling events for BTC and targeted higher prices. In addition, two altcoins stand out as being in a similar situation with negative funding rates and accumulated short position liquidations.

‘short squeeze’ warning for BNB Chain (BNB)

BNB’s current funding rate is a leading signal for a potential ‘short squeeze’ on the token. CoinGlass’ 30-day funding rate heatmap shows this. Specifically, BNB short sellers are paying an APR of 32.63% for traders with long positions. This is likely to fuel short liquidations. BNB also has the sixth largest open interest in the derivatives market. This increases the relevance of the signal.

Funding Rate Heatmap: BNB, 30-day, sorted by Open Rate. Source: BNB: CoinGlass

As for price targets, BNB has short position liquidity pools between $600 and $630. The altcoin is currently trading at $590.

BNB Liquidation Heatmap, 1-month chart. Source: CoinGlass

The second ‘short squeeze’ potential altcoin: Bitcoin Cash (BCH)

Bitcoin Cash (BCH) has an even higher negative funding ratio of 35.96%. It is also the 10th largest cryptocurrency ranked by open interest.

Funding Rate Heatmap: BCH, 30-day, sorted by Open Rate. Source: CoinGlass

BCH’s liquidity pools are less concentrated than BNB’s. However, the coin’s current price is well below pending liquidations. Interestingly, there is a wide range of instabilities from $500 to over $700. This offers the potential for Bitcoin Cash to skyrocket, resulting in gains of over 40% if it sees a ‘short squeeze’.

BCH Liquidation Heatmap, 1-month chart. Source: CoinGlass

However, despite the above economic analysis, these cryptocurrencies may still exhibit negative price performance over the next few days. ‘Short squeeze’ technical indicators do not guarantee that this will happen. As the market moves, it is possible that things could change quickly. Therefore, traders need to be cautious.

The views and forecasts in the article are those of the analyst and are not investment advice. Cryptocoin.com we strongly recommend that you do your own research before investing.

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