As Bitcoin (BTC) recently took a downward turn to as low as $42,100, it caused a ripple effect across the cryptocurrency market. This bearish sentiment has led to heavy shorting of some cryptocurrencies, raising the possibility of short squeeze alert events on December 29. In this scenario, Bitcoin’s dominance took a significant hit, with altcoins managing to limit their losses more effectively.
Altseason Signs and Potential Liquidations
With the signs of an altseason becoming apparent, an increase in short positions could potentially lead to massive liquidations, propelling prices upwards. Our attention was drawn to two cryptocurrencies on CoinGlass’s dashboard that signaled a short squeeze alert. These were Cardano (ADA) and Radix (XRD), which had notably high volumes, with a bias towards short over long positions.
Cardano’s Short Squeeze Alert
Cardano, a longstanding and robust competitor to Ethereum (ETH), was the first to trigger a short squeeze alert. At the time of writing, its native token was trading at $0.623, marking a 3.65% drop in 24 hours. Despite a 22.89% decrease in its daily derivative volume, which currently stands at $1.22 billion, short positions still dominated at 53.27%, amounting to $697.96 million.
Interestingly, ADA is poised for a break-out from a symmetrical triangle, as we reported on December 27. If it manages to stay above this technical pattern, it could trigger the anticipated short squeeze, pushing the token’s value towards $0.78. This liquidation of shorts could also provide the necessary momentum for the break-out, creating a chicken-and-egg situation.
Radix’s Potential Skyrocket
Radix, another innovative Ethereum competitor with a focus on DeFi, has an even higher shorting rate. Short positions account for a whopping 77.60% of its $4.88 million 24-hour volume. A sudden shift towards bullish sentiment could result in the liquidation of over $3.79 million from short-seller traders, causing a massive short squeeze.
Currently, Radix’s native token is trading at $0.0451, down 4.19% on the day. Given its low capitalization, investors need to be wary of XRD’s high volatility. However, there’s no guarantee that these cryptocurrencies will experience a short-squeeze liquidation event. It’s crucial for cryptocurrency traders to conduct their own research and consider each project’s fundamental aspects when making financial decisions.
For those who want to keep a close eye on these developments, the cryptoview.io application can be a valuable tool. It offers real-time tracking and analysis of the cryptocurrency market, helping you stay informed and make educated decisions.
Download cryptoview.io now and stay ahead of the gameNote: The information provided in this article should not be considered as investment advice. Investing is speculative, and you should be aware that your capital is at risk.
