This Could Be “Rocket Fuel” For XRP and Cardano (ADA)

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As a researcher with a background in cryptocurrency analysis, I find the current situation surrounding XRP and Cardano (ADA) intriguing. Based on recent data from Santiment, these two cryptocurrencies have been among the most heavily-shorted coins following their relief bounces. This could potentially be a good sign for the bulls, as liquidated shorts can act as “rocket fuel” for sustained price increases.

As a cryptocurrency analyst, I’ve noticed that according to data from Santiment, a reputable analytics platform in the crypto space, XRP and Cardano (ADA) are currently among the most shorted cryptocurrencies after experiencing recent relief bounces. This means that a large number of investors have bet against these digital assets, expecting their prices to decrease further. However, it’s important to keep in mind that high levels of shorting can sometimes lead to a short squeeze, where the price unexpectedly rises, leading to significant losses for those who had bet against it.

As a researcher studying market trends, I would interpret the statement made by the firm as follows: If short positions have been liquidated, it could be a positive indicator for the bullish trend. In simpler terms, these liquidated shorts might function as an additional force driving up prices in a sustained manner.

When a substantial number of traders have wagered that the price of a particular cryptocurrency will decline, leading to an unequal balance between those looking to sell and those wanting to buy, this situation is referred to as a “squeeze.” In the context of cryptocurrencies, it’s often called a “short squeeze” since these traders have taken a short position in the market.

According to U.Today’s report, XRP cryptocurrency broke free from Bitcoin‘s influence and surged by up to 7% on July 17. Simultaneously, it outshone other top 100 cryptocurrencies during this period.

During this period, Cardano (ADA) is gaining traction due to the excitement surrounding the imminent deployment of the “Chang” hard fork. According to U.Today’s report, Charles Hoskinson, Cardano’s founder, emphasized that this event represents a significant achievement for the proof-of-stake network and the entire crypto sector at large.

As a researcher studying the cryptocurrency market, I’ve observed that XRP and Ada have experienced notable growth in the last 24 hours, with XRP advancing by 3.7%, and Ada following closely behind with a 4.7% increase. Currently, XRP holds the 8th position in terms of market value, while Ada occupies the 11th spot.

Up to this point, the mentioned cryptocurrencies, specifically XRP and ADA, have shown minimal price swings based on Coinglass data. However, it’s important to note that $1.02 million in XRP and $217,830 in ADA were liquidated within a day. This number could significantly increase if short selling becomes more aggressive. In turn, a sudden price surge due to a short squeeze might trigger additional liquidations, creating a potentially larger domino effect.

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2024-06-19 23:18