The on-chain analytics platform Santiment has highlighted a factor that could potentially contribute to Cardano (ADA) and XRP experiencing further upward movements in their prices. This factor revolves around the heavy shorting activity that these two cryptocurrencies are currently facing. Despite recent relief pumps in the crypto market, it is important to note that many market traders do not consider this as a clear signal of a bullish reversal. Santiment mentioned in a post on X (formerly Twitter) that the significant shorting of Cardano and XRP might actually act as “rocket fuel” for their prices to continue rising. This heavy shorting has positioned Cardano and XRP among the most notable altcoins with high short positions following their recent bounce back in prices.
The fact that Cardano and XRP are among the most heavily shorted altcoins is not entirely surprising, especially when considering their performance this year compared to other cryptocurrencies in the top 50 by market capitalization. Both Cardano and XRP have struggled to make significant gains, even when Bitcoin (BTC) and the broader crypto market have seen substantial rebounds. Despite this trend, the recent price recovery seen in Cardano and XRP, while other altcoins lag behind, suggests a potential shift in momentum. The liquidation of these short positions could serve as the catalyst needed for Cardano and XRP to move higher in value.
Data from Coinglass further validates Santiment’s theory, as it shows that the bears in Cardano and XRP have incurred notable losses in the past 24 hours. Over $50,000 worth of Cardano short positions were liquidated during this period, whereas no long positions were affected. Similarly, over $30,000 in XRP short positions were liquidated, with XRP longs remaining untouched. These market movements suggest that there could be a shift in sentiment towards these two cryptocurrencies, potentially leading to further price increases.
Crypto analyst Egrag Crypto has made bold predictions regarding the future price of XRP. He suggested that XRP could see a price pump of up to 1,700% starting in July, drawing parallels to a quarterly hammer formation that occurred between April and June 2016 and July and September 2017. According to Egrag, for this prediction to materialize, XRP must close the 3-month candle above the range of $0.55 and $0.58 within the next 10 days. If the pattern resembles that of 2016, XRP could potentially begin a significant price rally in July, reaching $8. However, if it follows the pattern from 2017, XRP holders may need to wait another six months before experiencing a substantial pump of around 5,500%, taking the price of XRP to $27.
The heavy shorting activity in Cardano and XRP presents a unique opportunity for these cryptocurrencies to experience further price gains. The potential liquidation of short positions could serve as a turning point for these altcoins, especially when considering their underperformance compared to other cryptocurrencies. It will be interesting to see how these factors play out in the coming weeks and whether the price predictions for XRP will come to fruition. Investors and traders alike should keep a close eye on these developments to capitalize on potential opportunities in the market.