Search
Close this search box.

Search

Cardano, Ripple Bracing for Short Squeeze as Prices Rebound

Join us on :

Cardano and Ripple are facing an onslaught of short bets by traders despite both coins experiencing brief price rebounds. This shorting frenzy comes after these altcoins saw significant dips. Also, it reflects a widespread belief among some investors that a further decline is imminent.

However, on-chain analytics firm Santiment has detected a surge in shorting activity. This could ironically turn into a bullish signal for long-term holders.

Potential Short Squeeze Lifts Spirits of Long-Term Investors

Data from Binance reveals that funding rates for ADA and XRP have climbed into positive territory, indicating that short positions outweigh long positions. This might paint a bleak picture for the coins’ immediate future. However, potential short squeeze could send their prices soaring if a significant number of short sellers are forced to buy back in to cover their losses.

Read Also: ADA Price Rises 2.63% in 24 Hours Despite Week-Long Downturn: What’s Driving the Volatility?

Undervalued Assets? MVRV Ratios Offer Hope

A deeper dive into on-chain metrics reveals some promising signs. Cardano’s Market Value to Realized Value (MVRV) ratio currently sits at -12.6%, suggesting the coin is significantly undervalued. XRP’s MVRV ratio, while not as dramatic, rests at -3.5%, hinting at some potential for upside. Historically, low MVRV ratios have often preceded price surges as these assets become more attractive to bargain-hunting investors.

Cardano’s Chang Hard Fork: A Ray of Hope

Cardano is on the cusp of a major upgrade, the Chang hard fork, which will usher in the Voltaire era. This much-anticipated update paves the way for Cardano’s transition to a fully decentralized governance model. Charles Hoskinson, the founder of IOG, has indicated that the development work for this transition is nearing completion.

XRP: Open Interest in Futures Contracts Hints at Bullish Outlook

While the broader cryptocurrency market remains mired in a downturn, XRP is experiencing a rise in open interest on futures contracts. This suggests that some investors are betting on a price increase for XRP, despite the ongoing legal battle between Ripple and the SEC. The SEC’s lawsuit against Ripple continues to cast a shadow of uncertainty over XRP’s future. Its resolution could significantly impact the coin’s market performance.

A Delicate Balancing Act: Sentiment vs. Fundamentals

The current market activity surrounding Cardano and Ripple highlights the delicate interplay between trader sentiment and fundamental developments. The heavy shorting suggests a bearish outlook in the short term. However, factors like undervalued assets and upcoming milestones paint a more optimistic picture for the long term.

cryptoboom tele

Share this :

Facebook
Twitter
LinkedIn
Telegram
WhatsApp

Cardano and Ripple are facing an onslaught of short bets by traders despite both coins experiencing brief price rebounds. This