The on-chain analytics firm Santiment has highlighted three altcoins that may be poised for future price increases. In a recent post on X, Santiment discussed the potential of Aave (AAVE), The Graph (GRT), and Decentraland (MANA) due to current trends in their Binance Funding Rates. The Funding Rate is an indicator that tracks the fees traders on Binance derivatives exchange pay each other periodically.
When the Funding Rate is positive, it indicates that long investors are compensating short holders to maintain their positions, suggesting a bullish market sentiment. Conversely, a negative Funding Rate implies that shorts outnumber longs, indicating a bearish outlook.
According to a chart shared by Santiment, the Binance Funding Rate for AAVE, GRT, and MANA has recently turned negative. This shift suggests that investors have opened a significant number of short positions on these altcoins, changing the market dynamic.
This increased shorting activity comes at a time when the cryptocurrency market is rebounding, driven by Bitcoin’s recovery above $58,000. Derivatives users appear to be skeptical that AAVE, GRT, and MANA will ride this bullish wave. However, this widespread pessimism could actually benefit the prices of these altcoins.
Mass liquidation events are more likely to impact the side of the market with the most positions. Currently, the bearish side is dominant, which could lead to mass short liquidations in the coming days. When a large number of liquidations occur simultaneously, a phenomenon known as a “squeeze” can lead to significant price volatility. Santiment suggests that if these shorts face a liquidation event, the altcoins could experience substantial price jumps.
Aave, in particular, has been gaining bullish momentum, with its price climbing to $147 after an 11% increase over the past week. The altcoin’s price trend has been on an upward trajectory, indicating potential further gains.
It remains to be seen whether Aave, The Graph, and Decentraland will see price surges from here, potentially punishing those betting on a bearish outcome.
