Short Squeeze Alert for Ethereum (ETH)
After a period of bullish sentiment in the crypto market, there has been a shift towards a slightly bearish stance. Bitcoin (BTC) has led this movement, with a retracement below the previous all-time high support line at $69,000. This has resulted in changes to the open interest (OI) landscape in the derivatives market, with short positions now dominating.
However, this scenario creates an opportunity for short squeezes to occur if short-sellers get liquidated, potentially driving prices upwards. In this article, we will highlight two cryptocurrencies that have a higher short-squeeze potential and could experience a pump next week.
Ethereum (ETH)
Ethereum (ETH) is currently trading at $3,709 with neutral price action and accounts for nearly 47% of its daily volume. Long positions have dominated the past 24 hours, representing 51.74% of the total volume. However, when looking at larger time frames, shorts still dominate the remaining open interest.
The ETH weekly liquidation heatmap reveals cumulative short liquidations in the $4,100 zone. Market makers may target this zone through a short squeeze to pump the price into this liquidity pool and potentially push it higher.
Litecoin (LTC)
Litecoin (LTC) is currently trading at $89.93 and has seen a slight increase of 2.72% in the last 24 hours. This can be attributed to the โPaymentsโ crypto narrative gaining traction. Similar to Ethereum, LTC also has a significant liquidity pool to the upside due to short position dominance in its open interest.
The heatmap shows three of these pools in the $100 psychological resistance zone, making it a likely target for a potential short squeeze next week. If successful, this could result in a pump in LTCโs price.
In summary, a short squeeze rally to the potential zones mentioned above could lead to gains of 10.5% for Ethereum (ETH) and 11.2% for Litecoin (LTC). However, it is important to remember that cryptocurrencies are volatile and unpredictable assets. Traders should approach opening positions with caution and implement proper risk management strategies to avoid liquidation.
Hot Take: Potential Short Squeezes in ETH and LTC
As the crypto market experiences a shift towards a slightly bearish stance, there is an opportunity for short squeezes to occur. Ethereum (ETH) and Litecoin (LTC) have been identified as two cryptocurrencies with a higher short-squeeze potential that could experience a pump next week.
Ethereum has shown neutral price action with long positions dominating the past 24 hours. However, shorts still dominate the remaining open interest, making it a prime candidate for a short squeeze. On the other hand, Litecoin has seen slight gains in the last 24 hours and has meaningful liquidity pools to the upside due to short position dominance in its open interest.
While these potential short squeezes present an opportunity for gains, it is important to approach trading with caution due to the volatility of cryptocurrencies. Traders should carefully consider their positions and employ proper risk management strategies to minimize the risk of liquidation.
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