The cryptocurrency market has left the Bitcoin halving behind. Macroeconomic developments and regulatory pressures will now be on the market’s agenda. For now, the market remains neutral, led by Bitcoin’s apparent consolidation phase. However, some altcoin projects are waiting for the right time to take off. Crypto analyst Vinicius Barbosa draws attention to 2 cryptocurrencies with high ‘short squeeze’ potential.
Two altcoin projects have ‘short squeeze’ potential!
As you have been following on Kriptokoin.com, there has been a flight from risk assets due to rising tensions in the Middle East in recent weeks. In the process, the cryptocurrency market faced a sharp sell-off. However, Bitcoin managed to recoup some of its market losses during the halving week. In a suddenly bearish environment, crypto traders started to open leveraged shorts. Now this could backfire.
Interestingly, when traders open short positions, they release liquidity in the form of collateral assets that the crypto exchange can liquidate if the price of the underlying asset rises to an agreed target. If multiple short positions are liquidated in sequence, it pushes the price up. Traders in the financial and crypto markets call this a ‘short squeeze’. Following recent developments, two altcoin projects have meaningful liquidity pools at higher prices. Bitcoin registration fees above $100 are likely to trigger a rally in these altcoins.
The first-ranked altcoin: Litecoin (LTC)
Currently, LTC is trading at $82.51 with a slight intraday gain of 1.71%. However, short sellers account for 51.54% of the total volume. Sellers dominated the 24-hour volume, opening positions worth $188.34 million.
As a result, you have a pool of millions of dollars of liquidity close to LTC’s $100 psychological level. Therefore, a ‘short squeeze’ to this possible resistance at current prices is likely. If this happens, LTC will reward investors with gains of over 21%.
Bitcoin Cash (BCH) is getting ready to make a splash too!
As we mentioned, fees for Bitcoin are rising rapidly. Another strong competitor with the potential to benefit is Bitcoin Cash, a fork of Bitcoin. However, unlike Litecoin’s $100 accumulated liquidations, BCH has a higher spread across multiple liquidity pools from $500 to $740. A ‘short squeeze’ rally in this range could send BCH flying. In this case, a 40% gain is potentially possible for traders.
The opinions and forecasts in the article are those of the analyst and are not investment advice. As Kriptokoin.com, we strongly recommend that you do your own research before investing. We also recommend that you keep in mind the highly volatile and risky nature of the crypto market.
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