Cardano (ADA) and Ripple’s XRP Shorts Surge!
As a crypto enthusiast, you may have noticed that Cardano (ADA) and Ripple’s XRP are currently experiencing heavy shorting activities from traders post a brief price surge, hinting at a potential rebound. Let’s delve into what’s causing this surge and what it means for these popular altcoins.
Heavy Shorting Activity on ADA and XRP
Recently, data from Santiment has pointed out that the shorting rates for both ADA and XRP on Binance have significantly increased over multiple occasions since September 2023 and May 2024, respectively. This surge indicates a prevalent shorting vs. longing trend in the market, especially for these two altcoins.
- This uptick in shorting activity has led many traders to anticipate a possible downtrend in the prices of ADA and XRP, prompting them to place short positions on these assets.
- However, Santiment believes that this heavy shorting could actually be a positive signal for patient bulls, as liquidated short positions can potentially fuel continued price increases.
Analysis and Insights
Earlier this week, the on-chain analytics platform highlighted that Cardano was extremely undervalued with a negative MVRV of -12.6%, while XRP’s MVRV stood at -3.5%. This analysis suggested bullish prospects for ADA’s price recovery and mild bullish conditions for XRP.
- The low MVRV ratio indicates that traders are currently holding assets below their initial purchase prices, historically leading to a rebound as buying interest increases.
Catalysts for ADA and XRP Prices
Looking ahead, Cardano is poised for a significant milestone that could act as a catalyst for its token. The upcoming Chang hard fork is expected to pave the way for the Voltaire era, transitioning Cardano from a blockchain governed by Input Output Global (IOG) to a fully decentralized and community-driven ecosystem.
IOG founder Charles Hoskinson recently shared, “It looks like June will be the month that Cardano Node will reach 9.0. This means that Cardano is Chang fork ready and waiting for 70 percent of the SPOs to install the new node. Then, a hard fork can occur pushing Cardano into the Age of Voltaire.”
On the other hand, XRP has witnessed minor spikes amidst a broader market downturn. The increase in open interest (OI) indicates that investors are opening positions in anticipation of a price rise, closely monitoring the legal battle between Ripple and the SEC.
Hot Take: What Does This Mean for You?
As a crypto investor, understanding the dynamics of shorting activities and their impact on the market is crucial. While heavy shorting might signal potential downtrends, it can also lead to bullish opportunities for those willing to wait. Keep an eye on upcoming developments and milestones for ADA and XRP to make informed investment decisions.
Sources:
Twitter – Santiment
Image Source – Cryptopotato
Owen Patter is a distinguished crypto analyst, accomplished researcher, and skilled editor, leaving a notable imprint on the cryptocurrency landscape. As a proficient crypto analyst and researcher, Owen delves into the intricate realms of digital assets, offering insights that resonate with a diverse audience. His analytical acuity is harmoniously paired with adept editorial skills, allowing him to transform complex crypto information into easily comprehensible content. Owen’s contributions serve as a valuable guide for both seasoned enthusiasts and newcomers, aiding them in navigating the dynamic world of cryptocurrencies with well-researched perspectives. With a meticulous commitment to precision, he empowers informed decision-making in the ever-evolving crypto domain.
