Altcoins
Cardano and two other altcoins show greater chances of liquidation-fueled rebounds, according to analytics firm Santiment
The chances of a big rally for Ethereum (ETH) rival of Cardano (ADA) and two other altcoin projects are growing rapidly, according to crypto analytics firm Santiment.
Santiment reports This ADA, the Chiliz fan engagement token (CHZ) and its ETH rival, Fantom (FTM) are facing negative financing rates, which opens the way to monetary tightening in the short term.
“When selecting altcoins, pay attention to which ones other crypto traders are betting on. When funding rates on major exchanges go deeply negative, as we see with Chiliz, Fantom, and Cardano, the risks of liquidations leading to pumps increase.”
Source: Santiment/X
According to Santiment’s chart, the last time these three projects saw similar negative funding rates in April and May, the tokens rebounded and saw double-digit gains.
Funding rates represent the sentiment of traders in the perpetual swap market and their amount is proportional to the number of contracts. Negative funding rates indicate that short traders are dominant and are willing to pay long traders.
A short squeeze occurs when traders who borrow an asset at a certain price in the hopes of selling it at a lower price to pocket the difference are forced to buy back the assets they borrowed as momentum turns against them, triggering further rallies.
At the time of writing, ADA is trading at $0.39, down over 5% in the last 24 hours. Meanwhile, Chiliz is trading at $0.0663 at the time of writing, down 5.7% on the day, and Fantom is trading at $0.43 at the time of writing, down 11% in the last 24 hours.
Feelings too said that cryptocurrency markets could be about to explode, given the growing number of discussions about digital assets on social media platforms.
“Cryptocurrency discussion rates are finally on the rise, especially on Telegram, Reddit, and X. With social volumes increasing, bulls are hoping to see overall network activity increase soon as a result, leading to greater utility and higher prices around the corner.”
Source: Santiment/X
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