Market traders have noted a recent trend in heavy shorting of Cardano (ADA) and XRP, two cryptocurrencies that have been struggling to gain bullish momentum. The on-chain analytics platform Santiment highlighted this factor in a recent X post, suggesting that the increased short positions on these tokens could actually serve as “rocket fuel” for their prices to rise further.
This heavy shorting of Cardano and XRP is seen as a positive sign by some market participants. The liquidation of these short positions could potentially create the momentum needed for these tokens to experience significant price increases. Despite being among the most shorted altcoins, Cardano and XRP have managed to attract attention due to their recent relief pumps in the midst of an overall market decline.
Cardano and XRP have been identified as two of the most underperforming coins in the cryptocurrency market this year, especially when compared to the top 50 tokens by market capitalization. These tokens have struggled to enjoy relief pumps in the past, even when Bitcoin and other cryptocurrencies have experienced significant rebounds.
However, the situation may be changing for Cardano and XRP. Recent data from Coinglass suggests that the heavy short positions on these tokens are beginning to unwind, with significant losses being incurred by the bears. Over $50,000 in Cardano short positions and $30,000 in XRP short positions were liquidated in the last 24 hours, indicating a shift in market sentiment.
Crypto analyst Egrag Crypto has put forth an intriguing prediction regarding XRP’s price potential. He pointed out a quarterly hammer formation observed in the past and suggested that a similar pattern could lead to a substantial price rally for XRP. Egrag mentioned the possibility of a 1,700% price pump for XRP starting in July if certain conditions are met.
According to Egrag, XRP would need to close a 3-month candle above a specific price range in order to trigger the projected price rally. If history repeats itself, XRP could potentially surge to $8 in the coming months. However, there is also a scenario where XRP could experience an even more significant pump of around 5,500%, reaching a price of $27, but this might require a longer waiting period.
The heavy shorting of Cardano and XRP could be a catalyst for potential price rises in the near future. While both tokens have faced challenges in gaining bullish momentum, the recent developments in the market suggest that a shift may be underway. The upcoming months could prove to be crucial for Cardano and XRP as they navigate through price volatility and market sentiment changes.
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