Short squeeze alert for the week: Two cryptocurrencies with potential to skyrocket

Cryptocurrency short-sellers have benefited in the last two months amid a short-term downtrend for the crypto market since March. Conversely, Finbold has spotted two cryptocurrencies signaling potential short squeezes and price surges for next week.

In this context, bullish diverges appeared in the price charts and among notable technical indicators, signaling a trend reversal. This fuels the usual short-squeeze alerts: negative funding rates, short-position volume increases, and leverage liquidations accumulation at higher levels.

Moreover, a rising optimism in India with reopened doors for offshore crypto exchanges validates the market potential for the following weeks from a regulatory and fundamental perspective.

As a result, cryptocurrencies that hold significant imbalances in the derivatives market could be the first to skyrocket.

Short squeeze alert for Avalanche (AVAX)

Avalanche (AVAX) is one of the likely cryptocurrencies to suffer a short squeeze next week, potentially sending its price skyrocketing. In particular, considering a relevant weekly open interest for short positions among cryptocurrency traders.

This has increased the negative funding rates for AVAX, with short-sellers paying a 5.8% APR to long-position traders. Finbold retrieved this data from CoinGlass on May 11, alongside other relevant indicators.

Notably, Avalanche’s 1-month liquidation heatmap shows a critical liquidity pool at $40 per token, which could become a short-squeeze target. A rally to this level would reward AVAX traders with over 17% quick gains from current prices at $34.

Bitcoin Cash (BCH) price skyrocketing potential

Similarly, Bitcoin Cash (BCH) has a notable negative funding rate of 10.06%, with the 10th highest open interest in the market.

Meanwhile, BCH could go as high as $625 after hitting the previous liquidation target of $500 in two short-squeeze events. This would result in gains from 16% to 45%, considering Bitcoin Cash currently trades at $430.

However, other factors could prevent the forecasted trend reversal and short squeezes for AVAX, BCH, or other cryptocurrencies. Traders must remain cautious while opening leveraged positions and speculating in this volatile landscape.

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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