Altcoin
Cardano and Two Other Altcoins Show Increased Potential for Liquidation-Fueled Rallies, According to Analytics Firm Santiment
Probability of a Big Rally for Ethereum (ETH) rival Cardano (ADA) and two other altcoin projects are growing rapidly, according to crypto analytics firm Santiment.
Holiness relationships that ADA, Chiliz fan engagement token (CZ-CZ) and ETH rival Fantom (FTM) face negative funding rates, which sets the stage for short-term contraction.
“When selecting altcoins, be aware of those that other crypto traders are betting against (shorting). When funding rates on large exchanges drop heavily into a negative range, as we see with Chiliz, Fantom, and Cardano, the chances of liquidations leading to pumps increase.”
Source: Santiment/X
According to Santiment’s chart, the last time these three projects saw similar negative funding rates, in April and May, the tokens recovered and posted double-digit gains.
Funding rates represent trader sentiment in the perpetual swap market and the amount is proportional to the number of contracts. Negative funding rates indicate that short traders are dominant and willing to pay long traders.
A short squeeze occurs when traders who borrow an asset at a certain price in the hopes of selling it at a lower price to pocket the difference are forced to buy back the borrowed assets when the situation turns against them, triggering further increases.
ADA is trading at $0.39 at the time of writing, down over 5% in the last 24 hours. Meanwhile, Chiliz is trading at $0.0663 at the time of writing, down 5.7% on the day, and Fantom is trading at $0.43 at the time of writing, down 11% in the last 24 hours.
Holiness also He says that cryptocurrency markets may be about to explode, due to the growing amount of chatter about the digital asset on social media platforms.
“Cryptocurrency discussion rates are finally improving, especially on Telegram, Reddit, and X. With social volumes rising, bulls are hoping to see an increase in overall network activity soon, which will lead to higher utility and higher prices around the corner.”
Source: Santiment/X
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