Two cryptocurrencies with potential for rapid growth

Cryptocurrency short sellers have benefited over the past two months from a short-term downtrend in the crypto market since March. Conversely, Finbold has spotted two cryptocurrencies that point to potential short squeezes and price increases next week.

In this context, bullish divergences appeared on the price charts and key technical indicators, signaling a trend reversal. This leads to the usual short squeeze warnings: negative funding rates, increases in short position volume, and the accumulation of leverage liquidations at higher levels.

Furthermore, the increasing optimism in India with the reopening of the doors to offshore crypto exchanges confirms the market potential for the following weeks from a regulatory and fundamental perspective.

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

Avalanche Short Squeeze Alert (AVAX)

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

This has increased negative funding rates for AVAX, with short sellers paying a 5.8% APR to traders with long positions. Finbold retrieved this data from CoinGlass on May 11, along with 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 rebound to this level would reward AVAX traders with over 17% quick gains from the current price of $34.

The potential for Bitcoin Cash (BCH) price to rise.

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

Meanwhile, BCH could rise to $625 after hitting the previous liquidation target of $500 in two short squeeze events. This would result in gains of 16% to 45% considering Bitcoin Cash is currently trading at $430.

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

Disclaimer: The content of this website should not be considered investment advice. Investing is speculative. When you invest, your capital is at risk.