Santiment highlights the prevalence of short positions in Cardano (ADA) and XRP, suggesting a potential bullish outlook for both assets.
Derivatives data reveals a higher number of short positions, but Binance account ratios indicate more optimism.
Low MVRV ratios and recent price movements suggest that Cardano and XRP may be undervalued.
Santiment, a leading cryptocurrency analytics platform, has recently shed light on the prevalence of short positions involving Cardano (ADA) and XRP, indicating that this metric could potentially signal a bullish outlook for both digital assets.
In the aftermath of the recent market downturn, these prominent altcoins have suffered significant losses, but the insights provided by Santiment suggest that a potential bullish reversal may be on the horizon.
Cardano and XRP are a couple of the most notable altcoins that are seeing heavy trader shorting following relief bounces. This is a good sign for patient bulls, as liquidates shorts can effectively act as 'rocket fuel' for continued price rises. pic.twitter.com/lHdMCLbngR
— Santiment (@santimentfeed) June 19, 2024
Cardano and XRP Witness Surge in Short Positions
According to a recent post by Santiment on X (formerly Twitter), Cardano and XRP are currently among the most prominent altcoins experiencing heavy shorting activity, despite the recent relief bounces observed in the market.
Interestingly, Santiment interprets this trend as a positive signal, proposing that the liquidation of these short positions could potentially act as a catalyst for a substantial price increase in the near future.
For Cardano, the accompanying chart provided by Santiment indicates that the Binance Funding Rate currently stands at -0.013743, signifying a dominance of short positions. Furthermore, derivatives data obtained from analytics resource Coinglass confirms the increase in shorts, with the long/short ratio for ADA sitting at 0.9755.
Remarkably, despite the surge in short positions, the Binance long/short ratio for accounts is notably higher at 2.51. This discrepancy suggests that while traders have opened more short positions than long ones, Binance accounts betting on a price increase outnumber those betting on further declines.
Santiment’s analysis of the heavy shorting activity surrounding Cardano and XRP, coupled with the insights from derivatives data and MVRV ratios, suggests that these altcoins may be poised for a bullish turnaround. The potential for short covering and the undervaluation of these assets could fuel a rapid price recovery in the near future.