Data Points To Bounce, But There’s A Catch

Just like Bitcoin (BTC), the altcoin traders are awaiting a season of bull market environment in coming future. From early 2022, the crypto market as a whole saw a constant drop in prices following a staggering price jump last year. In this context, there are more profit taking open trade positions currently than there are long term buy positions. This is a clear indication of the prevailing negative market sentiment plagued by unfavorable macro environment.

A Short Altcoin Season Incoming?

According to Santiment Insights, there have been a spurt in short positions in altcoins. The number of short positions are way higher than long term trades in altcoins. This essentially means there are more traders betting on price drop than those who are betting on the price rise. However, historic data shows that such scenarios would generally lead to a sudden price rise. Whether such a price bounce happens and subsequently lead to a short altcoin season remains to be seen.

“With crypto markets declining Thursday, short positions are opening up in large quantities for most altcoins as traders try to profit from prices dropping. Historically, when funding rates show significant shorts, liquidations are more common and surprise bounces can occur.”

However, altcoins too are getting swayed by macroeconomic events and sentiments just like BTC. Whenever BTC has a price drop due to macro downturns, the altcoins too are seeing a subsequent price decline. This is largely the same with a majority of the top 100 cryptocurrencies by market cap. Almost all major altcoins are currently trading at a 70% loss from last year’s peak range.

As of writing, Ripple (XRP) price stands at $0.4368, down 5.47% in the last 24 hours, according to price tracking platform CoinMarketCap. Cardano (ADA) is currently trading at $0.3393, down 5.16% in last 24 hours while Solana (SOL) price stands at $28.07, down 5.36% in last 24 hours.