Cardano (ADA) and XRP (XRP) See Heavy Short Selling, a Good Sign for Patient Bulls, Santiment Says

Short sellers have been increasing their bets against both Cardano ($ADA) and the native token of the XRP Ledger ($XRP) in a potential positive development for

Short sellers are ramping up their bets against both Cardano ($ADA) and the XRP Ledger’s native token ($XRP), which could bode well for patient long-term investors as liquidated shorts can help propel these cryptocurrencies’ prices.

On-chain analytics firm Santiment noted in a post on microblogging platform X (formerly known as Twitter) that funding rates on cryptocurrency exchange Binance showed a preference for short over long positions since September 2023 for ADA and May 2024 for XRP.

This finding comes as investors look for a recovery in the cryptocurrency market, with ADA and XRP emerging as two altcoins seeing an increase in short positions following a recent uptick in their prices. Short selling involves traders borrowing an asset, selling it, and aiming to repurchase it later at a lower price to pocket the difference.

Earlier this week, Santiment’s analysis highlighted both ADA and XRP as being potentially undervalued. The Market Value to Realized Value (MVRV) ratio, which compares the market capitalization of an asset to the total realized value of all its coins in circulation, suggested ADA could be extremely undervalued and XRP was in “mild bullish conditions.” Historically, lower MVRV ratios have seen price rebounds as undervalued assets attract renewed buying interest.

Market analysts are also echoing Santiment’s optimistic outlook, especially for XRP and Cardano. A pseudonymous analyst known as Cryptobilbuwoo shared a weekly chart-based analysis suggesting a correlation between XRP’s price movements and altcoin dominance (ALT.D).

His analysis suggests that every time ALT.D retests an upward trend line, XRP tends to rally, positively impacting the broader altcoin market. According to his technical analysis, XRP could potentially surge to $2.71, indicating an upcoming technical rebound.

Meanwhile, analysts are suggesting that Cardano’s price could soon rebound and its current price level is “an incredible opportunity” to dollar-cost average (DCA) into the cryptocurrency as its price trends down.

News source：https://www.kdj.com/cryptocurrencies-news/articles/cardano-ada-xrp-xrp-heavy-short-selling-sign-patient-bulls-santiment.html

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