Crypto intelligence firm Santiment says that significant price spikes could be coming for seven different altcoins based on under-the-radar data.
Santiment says that an excessive number of short-sellers are piling into altcoins, raising the probability of an incoming short squeeze.
A short squeeze occurs when a large number of traders try to short an asset, and then get hit by an unexpected price bump which triggers a cascade in liquidations and a price rise thereafter.
The analytics firm says that excessive shorts, plus negative funding rates on exchanges are threatening the bears when it comes to Binance Coin (BNB), Axie Infinity (AXS), Monero (XMR), NEM (XEM), Ankr, SiaCoin (SC) and DigiByte (DGB).
“We’re seeing a notable rise in leveraged short positions across different #crypto assets currently. Average exchange funding rates are negative for altcoins such as ANKR, XEM, SIA, XMR, AXS, DGB, & BNB. If these shorts are liquidated, it can lead to major price spikes.”
Looking at Bitcoin, Santiment sees some bullish on-chain metrics looming behind the scenes for the largest crypto asset by market cap. According to the firm’s data, BTC is flying out of exchanges at a rate not seen since 2018, which could suggest that another major liquidation event is less likely than price action would suggest.
“In the midst of Bitcoin’s 10-week price retrace, its ratio of supply on exchanges has dropped to its lowest level since November 2018. Traders moving BTC to cold wallets continues, and this milestone points to less risk of a continued major selloff.”
Santiment also points out that Bitcoin whales, or entities with 1,000 to 10,000 BTC, have accumulated over 40,000 coins in the last two days, equivalent to roughly $1,689,160,000.
“Bitcoin has rebounded, and is +$1,000 in price the past 5 hours. Now sitting at $42.4k, this comes after whales have accumulated 40k more BTC in the past 2 days alone. They now are back to owning the same amount from before their dump began at $49k.”
At time of writing, BTC is trading at $42,229.
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