In a world where fluctuations in cryptocurrency values can make or break fortunes overnight, the on-chain analytics platform, Santiment, has revealed intriguing insight into the potential trajectory of crypto tokens Cardano (ADA) and XRP. Both the tokens have recently exhibited encouraging relief pumps. Despite this glimmer of growth in the midst of the waning crypto market, traders are careful not to hastily proclaim a bullish reversal.
This cautious optimism ignites from what Santiment identifies as ‘heavy trader shorting’. This phenomenon, currently experienced by Cardano and XRP, could potentially act as a pivotal propellant, catalyzing substantial price hikes in these crypto tokens. The company further divulged that these tokens were leading the pack amongst the most shorted altcoins post relief bounces.
Such an observation might ordinarily incite pessimism. However, the narrative differs this time. These heavily shorted positions, in reality, might just be the windfall the patient bulls have been waiting for. The liquidation of these short positions could instigate the momentum these crypto tokens require to escalate even higher. The fact that Cardano and XRP were singled out as the most shorted altcoins shouldn’t elicit surprise, given their status as the least performing coins of this year, nested amongst the top 50 in the crypto universe by market capitalization.
Historically, Cardano and XRP have missed out on relief pumps, even during periods when their more prosperous peers, including Bitcoin (BTC), have enjoyed a significant resurgence. However, the current scenario prognosticates a differing fate. Both Cardano and XRP have savored a modest recovery in prices recently, outshining some of their altcoin brethren.
According to data sourced from Coinglass, Santiment’s hypothesis seems to already be in motion. Over the last 24 hours, short positions on Cardano and XRP have been hit hard, reflecting mounting losses. Specifically, short positions on Cardano worth over $50,000 have been liquidated in this period, whereas not a single cent has been touched in Cardano’s long positions. In parallel, XRP’s short positions worth over $30,000 have been liquidated, leaving the long positions untouched.
Projections for XRP’s future appear to be even more promising. Noted crypto analyst Egrag Crypto has painted an optimistic future, suggesting a potential 1,700% price pump for XRP commencing from July. His theory hinges upon XRP’s quarterly hammer formation observed between April-June 2016 and July-September 2017, preceding a significant rally in the crypto token’s price. If this bullish pattern were to repeat itself, XRP would need to clear the 3-month candle, closing above the range between $0.55-$0.58 within the next ten days.
Egrag’s projections anticipate two possibilities. If the hammer formation mirrors the one from 2016, XRP could potentially commence a price rally of 1,700% in July, pushing the token’s price to a respectable $8. Alternatively, if the hammer formation follows the pattern of 2017, XRP enthusiasts might need to cultivate patience for another six months before experiencing a monumental price surge of 5,500%. Such a trajectory would catapult XRP’s price to an unprecedented high of $27.
