Short Squeeze Opportunities in the Cryptocurrency Market
In the volatile world of cryptocurrencies, short positions can lead to a short squeeze, creating potential for price pumps. If you’re a crypto enthusiast, it’s important to be aware of these opportunities. Finbold has analyzed data from CoinGlass and identified two potential cryptocurrencies that could experience a short squeeze next week due to significant liquidity pools.
Huge Pump Potential for Chainlink (LINK)
Chainlink (LINK) stands out as having one of the biggest short-squeeze potentials at the moment, with substantial liquidations at higher price levels. There is a target of $20.41 for whales and market makers looking to exploit these short positions, resulting in $115,000 worth of liquidations. With LINK currently trading below $18, this represents a pump potential of over 13% for the upcoming week.
- Chainlink traders may liquidate long positions just below current prices to increase short positions and enhance the likelihood of a short squeeze.
Bitcoin (BTC) to Suffer a Short Squeeze Soon
Bitcoin (BTC), as the market leader, is also poised for a potential short squeeze. Currently consolidating within a range, there are liquidations available in both directions. The heatmap for Bitcoin shows smaller liquidity pools slightly below current levels and more significant liquidations around the $54,400 zone, amounting to nearly $800 million.
- A short squeeze for Bitcoin next week could result in a price increase of over 6% and lead to the liquidation of BTC short-sellers.
Hot Take: Play the Crypto Game Cautiously
While short squeeze opportunities can be enticing, it’s essential to approach them with caution. Keep in mind that liquidity pools alone cannot guarantee a liquidation event, as cryptocurrency prices are influenced by various factors and the market is constantly changing. As an investor, it’s crucial to understand the risks involved and make informed decisions.
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