The crypto market rollercoaster continues. A brief surge for Cardano (ADA) and XRP was met with a wave of short sellers, pushing both coins back into the red zone. This unexpected turn of events has analysts divided, with some seeing it as a bullish signal and others a cause for concern.
Short Sellers Circle ADA and XRP
Data from Santiment, a crypto market intelligence platform, revealed a surge in short positions for both ADA and XRP following a minor price increase. This suggests traders were skeptical of the rally triggered by the SEC dropping its security probe into Ethereum. The shorting activity for ADA is the highest in nine months, while XRP’s bearish bets hit a one-month peak.
While this shorting drove both coins down, analysts at Santiment believe it could be a positive sign for long-term bulls. Liquidating these short positions could trigger a short squeeze, propelling prices upwards.
XRP Open Interest on the Rise
CryptoQuant data paints a slightly different picture for XRP. Open Interest, an indicator of market activity and potential future price movements, has been steadily increasing for XRP. This suggests growing confidence and could lead to price appreciation, but also carries the risk of increased volatility.
Looking beyond the short-term price action, Cardano founder Charles Hoskinson revealed plans to implement decentralized representatives (dReps) within 90 days of the Chang hard fork. This move aligns with the recent news of Cardano’s treasury, valued at nearly $682 million, being transferred to the community.
Ripple’s ongoing lawsuit with the SEC continues to be a major factor for XRP. A favorable outcome could significantly boost the coin’s price.
Also Read: Cardano To $1 After Crypto Crash? Chang Fork Ignites Bullish Talk
Uncertain Future for ADA and XRP
The recent price swings and mixed signals from market data make it difficult to predict the future of ADA and XRP. While short sellers may have dampened the short-term rally, their actions could also fuel a future surge. Investors should closely monitor market developments, legal cases, and upcoming protocol changes before making any investment decisions.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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