Most altcoins have enjoyed a positive run in the past few days, while the world’s largest cryptocurrency, Bitcoin, has somewhat struggled following the approval of spot Bitcoin ETF trading in the US. Specifically, Ethereum has been the cream of the crop, with a substantial 13% price surge in the past week.
Blockchain analytics firm Santiment has offered on-chain insights into two altcoins that could experience price growth in the near future.
How Short Positions Can Trigger Upward Price Movement For These Altcoins
In a recent article on the X platform, Santiment revealed Axie Infinity (AXS) and Bitcoin Cash (BCH) as two altcoins that now have a larger ratio of shorts than longs. According to the on-chain analytics platform, the two cryptocurrencies are part of a small group of cryptocurrency assets on which traders are placing bets that their prices will drop.
Santiment stated in its post that investors seem to have faith in an imminent price surge for most cryptocurrencies, except for AXS and BCH. As a result, most traders are taking more short positions on these coins, expecting their values to drop over the coming days.
Chart showing the funding rates of AXS and BCH on Binance | Source: Santiment/X
However, the analytics platform acknowledged that minor signs of a market bounce could lead to short liquidations and, ultimately, rapid price surges for the Axie Infinity and Bitcoin Cash tokens. For context, short liquidations occur when traders who have taken shorts are unable to cover the cost of their positions as the asset’s value climbs.
According to Santiment’s report, short liquidations could act as “rocket fuel,” leading to further price increases for the altcoins. In this scenario, the “rocket fuel” term comes from the forced buying of assets by short traders – usually in response to a market bounce, leading to significant upward price movement.
Ultimately, this interesting projection emphasizes the complexity of market dynamics and how the prices of crypto assets can be influenced by a variety of factors, including trader sentiment and emotion.
Bitcoin Cash Price
Like most other altcoins, Bitcoin Cash had a positive performance over the past week, with its price jumping by about 8.5% in the last seven days. However, a broader look shows that the token has not made the best start to the year, with its value down by 4.6% in the first two weeks.
As of this writing, the Bitcoin Cash coin is valued at around $256, reflecting a mere 0.1% price decline in the past day. Nevertheless, BCH ranks amongst the top 30 largest assets in the cryptocurrency sector, with a market capitalization of more than $5 billion.
Bitcoin Cash fails to hold above $260 on the daily timeframe | Source: BCHUSDT chart on TradingView