On-chain analytics platform, Santiment, has identified a potential factor that could contribute to Cardano (ADA) and XRP experiencing further price increases. Despite recent relief pumps in the crypto market, the prevailing sentiment among market traders is that these moves are not indicative of a bullish reversal. According to Santiment, heavy shorting activity on Cardano and XRP could serve as the “rocket fuel” needed for these tokens to continue their upward trajectory.
Cardano and XRP have been identified as two of the most heavily shorted altcoins following their recent relief bounces. While this may seem concerning, Santiment views it as a positive sign for patient bulls. The liquidation of these short positions could potentially provide the momentum necessary for Cardano and XRP to achieve higher price levels. This shorting activity is not unexpected, considering that both tokens have underperformed compared to other top 50 coins by market capitalization this year.
Historical Performance
Historically, Cardano and XRP have struggled to experience significant relief pumps even in situations where Bitcoin and the broader crypto market have seen substantial rebounds. However, the current scenario appears to be different, with Cardano and XRP demonstrating a modest price recovery while other altcoins lag behind. This divergence in performance could be an indication of a potential shift in market dynamics.
Recent data from Coinglass supports Santiment’s theory, showing that bears on Cardano and XRP have suffered significant losses in the past 24 hours. Over $50,000 worth of Cardano short positions have been liquidated during this period, while XRP shorts have also seen a similar trend with over $30,000 in liquidations. This data suggests that market sentiment may be shifting towards a more bullish outlook for these tokens.
Crypto analyst Egrag Crypto has made a bold prediction regarding XRP, suggesting that the token could see a price pump of up to 1,700% starting in July. Drawing parallels to historical price patterns, Egrag referenced a quarterly hammer formation in XRP’s price between 2016 and 2017, indicating the potential for a major rally. However, the analyst emphasized the importance of XRP closing above a specific price range within a defined timeframe to trigger this projected price increase.
While the heavy shorting of Cardano and XRP may initially seem concerning, it could actually be the catalyst needed for these tokens to experience significant price increases. Market dynamics are constantly evolving, and these two altcoins may be poised for a turnaround based on recent data and market analysis. Investors and traders should closely monitor developments in the coming weeks to see if these predictions come to fruition.
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