Short squeeze alert: 3 cryptocurrencies with pump potential this week

A sentiment shift took place in the cryptocurrency market, pivoting from mostly bullish to mostly bearish in a few days. A $230 billion crash in 24 hours liquidated over 240,000 traders in more than $500 million long positions.

In this context, cryptocurrencies saw a relevant increase in the volume of short positions, creating imbalances that now threaten a short squeeze. If the open interest remains dominated by Bitcoin short-sellers, they could be the next victims of massive liquidations.

Nevertheless, such a state can create opportunities for savvy traders who know where to look. For this reason, Finbold turned to liquidation data on CoinGlass and identified three cryptocurrencies likely to experience a short squeeze.

Short squeeze alert for Bitcoin (BTC)

Bitcoin (BTC) is the first cryptocurrency to trigger a short-squeeze alert with now accumulated liquidity to the upside.

In particular, CoinGlass’s weekly chart shows concentrated short-sellers liquidations at $74.346, which can become a target. Yet, there are smaller liquidity pools at other levels and a short squeeze could drive the price above $75,000.

Additionally, MartyParty spotted $8.1 billion of liquidations at $75,500, making it a relevant zone to consider.

Ethereum (ETH)

Meanwhile, Ethereum (ETH) also has some pump potential with many liquidity pools to the upside. However, ETH’s liquidation volume is proportionally smaller, weighted to its market cap and historical liquidations.

Still, some price levels gain the spotlight with higher leverage margin calls. On that, $3,600, $3,700, and above $4,000 are likely targets for a short squeeze.

As observed, opening leveraged short positions exposes traders to liquidations and incentivizes the market to go in the opposite direction of what most speculators are biased toward.

The cryptocurrency market is highly volatile and professional traders take advantage of this nature to increase their profits. Therefore, caution is needed when speculating and trading cryptocurrencies.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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