In a recent post on X (formerly Twitter), Santiment, an on-chain analytics platform, highlighted the heavy trader shorting of Cardano (ADA) and XRP. Despite the relief pumps that followed the recent market decline, market traders remain wary of considering this a bullish reversal. The heavy shorting of these two tokens could actually serve as the “rocket fuel” for further price rises, according to Santiment.
Good Sign for Patient Bulls
The fact that Cardano and XRP are among the most heavily shorted altcoins could be a promising sign for patient bulls. The liquidation of these short positions might just be the momentum needed for these tokens to surge higher. This is particularly significant as both Cardano and XRP have been underperforming throughout the year among the top 50 crypto tokens by market cap.
Unlike previous instances where Cardano and XRP failed to capitalize on the broader market rebound, this time seems different. Both tokens have shown signs of modest price recovery while some other altcoins continue to lag behind. This deviation from the norm could signal a shift in momentum for Cardano and XRP.
Evidence of Short Position Liquidation
Data from Coinglass supports Santiment’s theory, showing significant losses for Cardano and XRP bears in the past 24 hours. Over $50,000 worth of Cardano short positions were liquidated during this period, compared to no liquidation of long positions. Similarly, over $30,000 worth of XRP short positions were closed out while XRP longs remained unaffected.
Predictions of Price Surges
Crypto analyst Egrag Crypto recently forecasted a substantial price pump for XRP, suggesting a potential increase of around 1,700% starting in July. Drawing parallels to XRP’s historical price movements and quarterly hammer formations, Egrag emphasized the importance of closing the 3-month candle above a specific range within 10 days.
If XRP follows a pattern akin to that of 2016, Egrag projected a 1,700% price rally in July, pushing the token to $8. However, in the event of a pattern resembling that of 2017, XRP holders might have to wait six more months before experiencing a significant surge of around 5,500%, propelling the price to $27.
Despite their struggles this year, Cardano and XRP could be on the brink of a significant price surge fueled by the liquidation of short positions. The unique market dynamics surrounding these tokens present an intriguing opportunity for patient investors and traders looking to capitalize on potential bullish momentum.