According to cryptocurrency analytics firm Santiment, the likelihood of a major jump in Ethereum (ETH) rival Cardano (ADA) and two other altcoin projects has risen sharply.
In Santiment's data, #ADA , fan engagement token #Chiliz (CHZ) and #BTC rival Fantom (FTM) are facing negative funding rates, setting the stage for a short squeeze.
When choosing #altcoins , look out for altcoins that other crypto traders are betting on (shorting), as in the case of Chiliz, Fantom and #Cardano , as funding rates on major exchanges enter negative ranges, the likelihood of liquidation leading to a pon . increases.
According to Santiment's chart, the last time these three projects faced similar negative funding rates in April and May, the tokens rebounded and achieved double-digit growth.
Funding ratios reflect the sentiment of traders in the perpetual swap market, and their value is proportional to the number of contracts. A negative funding rate indicates a predominance of short traders and a willingness to pay for long traders.
A short squeeze occurs when traders who borrowed an asset at a certain price and are willing to sell it at a lower price to make up the difference are forced by momentum to buy back the borrowed asset, causing it to rise further. At the time of writing.
ADA is trading at $0.39 and has fallen more than 5% over the past 24 hours. Meanwhile, Chiliz is trading at US$0.0663, down 5.7 percent for the day, and Fantom is trading at US$0.43, down 11 percent in the last 24 hours.
Santiment also claims that the cryptocurrency market may be on the verge of a breakout due to the growing hype surrounding digital assets on social media platforms.
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