Which Altcoins Could Skyrocket Next? Analytics Firm Points To These
The on-chain analytics firm Santiment has pointed out how these three altcoins may be more likely to see price jumps in the coming future.
These Altcoins Are Being Heavily Shorted On Binance Right Now
In a new post on X, Santiment has discussed about some altcoins that could be worth keeping an eye on because of a trend forming in their Binance Funding Rate. The Funding Rate here refers to an indicator that tracks the periodic amount of fees that traders on a given derivatives exchange (in this case, Binance) are paying each other right now.
When the value of this metric is positive, it means the long investors are paying a fee to the short holders in order to keep their positions. Such a trend suggests the majority of the derivatives users share a bullish sentiment.
On the other hand, the indicator being negative implies the shorts are outweighing the longs, so a bearish mentality could be assumed to be the dominant one in the sector.
Now, here is the chart shared by the analytics firm that shows the trend in the Binance Funding Rate for three altcoins, Aave (AAVE), The Graph (GRT), and Decentraland (MANA), over the past week:
As is visible in the above graph, the Binance Funding Rate has recently switched from green to red for all three of these altcoins. This would suggest that the investors have opened a large amount of short positions on the exchange related to these assets, thus shifting the balance.
Interestingly, this heavy shorting from the investors has come as the cryptocurrency market as a whole has been rebounding, led by Bitcoins recovery back above $58,000. It would appear that derivatives users dont expect AAVE, GRT, and MANA to continue the bullish wave. This pessimism around the altcoins, however, can actually play into the benefit of their prices.
This is because mass liquidation events are more likely to affect the side of the market with the most positions. At present, the dominant side is the bearish one, so mass short liquidations could likely occur in the coming days.
Whenever a large amount of liquidations take place at once (an event thats popularly known as a squeeze), the price can see a burst of volatility arising out of all this fuel. As such, Santiment believes that should these shorts get caught in a liquidation event, the altcoins could see big price jumps.
It only remains to be seen, though, whether Aave and others would show price surges from here and punish these investors betting on a bearish outcome.
Aave Price
Aave has been enjoying bullish momentum during the last few days as its price has risen to $147 after witnessing a surge of over 11% in the last seven days.
Source: NewsBTC.com
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