Analysis News TheBitTimes.com

The cryptocurrency market experienced a massive crash on August 5, following macroeconomic news and other finance markets amid recession fears. Crypto short-sellers have increased their positions as a bearish sentiment surged, creating a favorable scenario for a short squeeze. Overall, derivatives crypto trading and open interest (OI) are leaning toward short positions, according to funding rates data from CoinGlass . The funding rate heatmap shows the top 30 cryptocurrencies ranked by OI have a clear dominance of negative funding APR. Essentially, a negative funding rate means short sellers must pay an APR on their positions to long-position traders. This is made to balance the market’s incentives and is a usual cause of short squeezes. The opposite happens with positive funding rates when bull traders pay the bears to keep their positions open. Picks for you ...

Most crypto currencies have accumulated huge losses in the past two weeks, with a sentiment shift from greed to fear. The currently bearish dominance has favored crypto short-sellers, who could now be exposed to a possible short squeeze . In a sell-the-news event, Bitcoin (BTC) dropped below $40,000 in the second week following the Bitcoin spot ETF approval. The cryptocurrency market followed the leader, losing over $325 billion in capitalization since January 11’s peak. Notably, this movement attracted bearish traders, and the market saw an increase in short positions for multiple crypto currencies. Therefore, crypto currency exchanges register accumulated liquidity upwards, which could trigger short- squeeze events at any moment. A short squeeze happens when trading positions are closed or liquidated if the cryptocurrency reaches the liquidation prices, skyrocketing the price to further liquidity pools. Bitcoin (BTC) is the best candidate for a short squeeze Crypto...