Altcoins Facing Shorting Activity on Binance
Data from Santiment reveals that two altcoins, Bitcoin Cash (BCH) and Loopring (LRC), are currently being shorted on the futures market. The funding rate for these assets on Binance has been negative, indicating a dominant bearish sentiment among traders. However, this negative sentiment can potentially benefit the prices of these altcoins. In the past day, both BCH and LRC have shown signs of a turnaround. If the market recovery continues, short positions may be liquidated, acting as “rocket fuel” for these altcoins.
Potential Squeeze for Bitcoin Cash
Bitcoin Cash is particularly facing significant FUD on Binance. As the asset begins to climb, there is a possibility of a mass liquidation event known as a “squeeze.” Squeezes are volatile events where prices move sharply in one direction. Based on the funding rate and brewing price action, BCH may experience an upward spike as shorts become vulnerable to a squeeze.
Performance of Altcoin Indexes Against Bitcoin
Glassnode’s weekly report highlights the performance of different altcoin sectors compared to Bitcoin. The report divides the sector into four indexes: DeFi Index, GameFi Index, Scaling Index, and Staking Index. Following the approval of the Bitcoin spot ETF earlier this month, all altcoin indexes experienced some growth. This suggests that as BTC sold off on this news, market participants showed increased risk appetite for altcoins across various sectors.
BCH Price Recovery
Bitcoin Cash has witnessed a turnaround and has surged back towards the $238 level recently.
Hot Take: Altcoins Face Shorting Activity, But Recovery Potential Lies Ahead
Altcoins like Bitcoin Cash and Loopring are currently being shorted on Binance, indicating bearish sentiment among traders. However, this negative outlook can work in favor of these altcoins. As market recovery takes place, short positions may be liquidated, potentially acting as “rocket fuel” for their prices. Additionally, Bitcoin Cash faces significant FUD on Binance, increasing the possibility of a squeeze that could lead to a sharp price increase. In the broader altcoin market, various sectors have shown growth compared to Bitcoin, suggesting increased risk appetite among investors. Despite shorting activity, altcoins have the potential for a turnaround and upward movement.
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