As a seasoned crypto investor with several years of experience under my belt, I firmly believe that keeping a close eye on which altcoins are being heavily shorted by traders is crucial for any investor looking to maximize their returns in this volatile market. And right now, based on the current negative exchange funding rates, three assets that should be on your radar are Cardano (ADA), Chiliz (CHZ), and Fantom (FTM).
For investors in altcoins, it’s crucial to keep an eye on the cryptocurrencies that see significant short positions among traders. This becomes even more relevant when large exchange funding rates turn negative. Currently, these assets include Cardano, Chiliz, and Fantom. The risk of forced liquidations rises substantially due to these unfavorable funding rates, potentially triggering considerable price surges.
Cardano’s price action has been facing challenges in continuing its uptrend. The value of ADA hovers around key resistance points, with the moving averages at $0.3970 providing essential support. Specifically, the 50 EMA (blue), 100 EMA (orange), and 200 EMA (black) serve as significant lines of defense for the cryptocurrency.
If the support levels can’t prevent a downward trend, the inability to surpass the 200 Exponential Moving Average (EMA) is a warning sign. On-chain statistics provide a more nuanced perspective. Approximately 69% of ADA address holders currently experience losses, while about 25% are currently profitable.
The imbalance indicates that numerous traders might be contemplating selling their positions if the price doesn’t increase, potentially triggering a series of liquidations. Furthermore, ADA‘s funding rates on Binance have been negatively set for the past five weeks. Historically, assets with sustained negative funding rates can experience short squeezes during liquidation events.
Should short sellers be forced to buy back their positions, this could lead to a sudden and substantial price surge for Cardano. According to Santiment’s data, ADA has historically experienced price jumps following periods of heavy shorting, such as the 10% rise that occurred earlier in the year. This trend suggests the likelihood of another price spike in the near term.
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2024-07-25 15:16