According to on-chain analytics firm Santiment, an interesting setup seems to be appearing for Polkadot (DOT), Stellar (XLM) and Monero (XMR), which might lead to price increases in the short term.
While Bitcoin persists in a downward trend, its price is gradually building support near the $17,000 level. However, Bitcoin's oscillating range price action in the $16,700 to $17,300 region appears to be encouraging traders to pursue some interesting setups in a few altcoins.
📊 As the weekend has kicked off, traders are betting against several #altcoins to profit on their downfalls. #Polkadot, #Monero, and #Stellar all have large #short positions on exchanges. Typically, this increases #liquidation & price rise likelihoods. https://t.co/5CWkrR1Jih pic.twitter.com/vkb8CmUQpJ— Santiment (@santimentfeed) December 10, 2022
According to Santiment, as the weekend has kicked off, traders are betting against several altcoins to profit from their price declines. The on-chain analytics firm notes that cryptocurrencies Polkadot, Monero and Stellar are seeing large short positions on exchanges, which suggests a dominance of shorts. It goes on to say that such a scenario increases the likelihood of liquidation and price increases.
Crypto assets with large dominance of shorts are likely to pop in market rallies, as investors who have bet against these assets are likely to cover their short positions, which can lead to what is known as a "short squeeze."
The crypto market is exhibiting slight selling pressure at press time, with the majority of crypto assets recording losses in the last 24 hours.
Considering the uncertainty in the market, concerns related to tight crypto regulation and fears of bankruptcy and contagion from the FTX implosion, it might be difficult to pinpoint the best time to buy a crypto asset. Therefore, it might be paramount to pay attention to market trends.
However, positive news might help buoy an asset higher. Polkadot's founder, Gavin Wood, recently shared that the first Polkadot OpenGov Fellowship that whitelisted root calls on the Kusama network had just been implemented. Top crypto exchange BitMEX also announced the listing of Polkadot on December 8.