The cryptocurrency market is trying to recover after falling during the week. While the leading crypto Bitcoin jumped as high as $67,000, the leading altcoin Ethereum started to recover its weekly losses. Amid these developments, according to crypto analytics firm Santiment, the possibility of a major rally for Ethereum’s rival Cardan and two other altcoins is rapidly increasing.
Santiment: The probability of a pump for these 3 altcoins is increasing!
As you have been following on Kriptokoin.com, the eagerly awaited spot Ethereum ETF trading has finally started. However, it was followed by a sharp drop in the ETF price on a sell-off. This spread across the market and dragged the market down. However, some tokens may be preparing for strong rallies. Analytics platform Santiment says that Ethereum rival Cardano (ADA), fan engagement token Chiliz (CHZ) and another Ethereum rival Fantom (FTM) are facing negative funding rates, setting the stage for ‘short squeezes’. In this context, Santiment makes the following statement:
When choosing altcoins, beware of those that are being bet against (shorted) by other crypto traders. As we have seen with Chiliz, Fantom and Cardano, when funding rates on major exchanges enter the largely negative range, the likelihood of liquidation leading to pumps increases.
Three altcoins made similar moves in April and May!
According to Santiment’s chart, the last time these three altcoins experienced similar negative funding ratios in April and May, the tokens bounced back and posted double-digit gains. Funding rates represent traders’ sentiment in the perpetual swap market. Also, the amount is proportional to the number of contracts. Negative funding ratios indicate that traders with short positions dominate and are willing to pay long traders.
A short squeeze occurs when traders who borrow an asset at a certain price in the hope of selling it at a lower price and pocketing the difference are forced to buy back their borrowed assets as momentum moves against them, triggering further rallies. ADA was trading at $0.4121 at the time of writing, up more than 4% in the past 24 hours. Meanwhile, CHZ is changing hands at $0.06975, up 5.6% on the day. Finally, FTM was trading at $0.4503, up 0.23% in the last 24 hours.
The crypto market may be on the verge of a breakout!
Santiment also says that crypto markets could be on the verge of breaking out, based on the growing amount of crypto asset chatter on social media platforms. In this regard, the analytics platform makes the following assessment:
Crypto discussion rates are finally rising, especially on Telegram, Reddit and X. With social volumes on the rise, bulls are hoping that overall network activity will soon pick up, leading to more benefits and higher prices around the corner.
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