On-chain analytics platform Santiment has highlighted an interesting factor that could potentially contribute to Cardano (ADA) and XRP making further moves to the upside. Despite the recent relief pumps observed in both tokens following the decline in the crypto market, market traders are remaining cautious, viewing these developments as temporary and not indicative of a bullish reversal.
Santiment’s analysis points to heavy trader shorting as a possible accelerator for continued price increases in Cardano and XRP. The platform’s X post noted that these two altcoins are currently experiencing significant short interest, which could act as the “rocket fuel” needed for their prices to surge. Additionally, Santiment disclosed that Cardano and XRP are among the most heavily shorted altcoins in the market, even after their recent recovery bounces.
This situation has been deemed a positive sign for patient bulls, as the liquidation of these short positions could serve as the driving force for these cryptocurrencies to climb higher. It is worth noting that Cardano and XRP have been underperforming throughout the year compared to other top 50 crypto tokens by market capitalization. Despite suffering from lackluster performance, especially during Bitcoin’s and the broader crypto market’s rallies, the recent modest price recoveries displayed by Cardano and XRP suggest a shift in momentum.
Data from Coinglass supports Santiment’s theory by reflecting the significant losses incurred by Cardano and XRP bears in the last 24 hours. With over $50,000 in Cardano short positions liquidated during this period and no liquidation of long positions, the potential for an upward price movement becomes more apparent. Similarly, XRP witnessed over $30,000 in short positions liquidated while long positions remained unaffected, signaling a possible shift in sentiment towards these altcoins.
Crypto analyst Egrag Crypto offered an interesting prediction regarding XRP, suggesting a potential price pump of 1,700% starting in July. He referenced XRP’s quarterly hammer formation patterns from previous years and indicated that a similar bullish trend could emerge if specific conditions are met. Egrag pointed out the importance of XRP closing the 3-month candle above a certain range within a specified timeline to trigger the projected price rally.
Moreover, Egrag highlighted two possible scenarios based on historical data. If XRP follows the 2016 hammer formation pattern, a 1,700% price rally could commence in July, leading the cryptocurrency to reach $8. Alternatively, if the 2017 hammer formation scenario unfolds, XRP holders might need to wait another six months for a “epic” price surge of around 5,500%, driving XRP’s price to $27.
The outlook for Cardano and XRP appears promising, driven by the dynamics of heavy trader shorting and potential market shifts. While past performance may not guarantee future results, the current trends and market sentiment surrounding these altcoins indicate a possible uptrend in the coming months. Investors and traders closely monitoring these developments could capitalize on the anticipated price movements and position themselves strategically to benefit from the expected surge in Cardano and XRP prices.
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