How altcoins are responding to BTC’s increasing shorts
YFI’s price has dropped over 9% in the past 24 hours, however, the trade volume was up 23.4%. Though it could mean that YFI is changing hands on exchanges with this newfound liquidity, it is more likely that the asset has given in to selling pressure and is now in the buy zone.
Based on metrics, it may be an ideal time to accumulate YFI. Other metrics that signal a change in YFI’s price trend are the number of transfers (7d moving average). The number of transfers has reached an ATL of 55.161. The previous ATL was observed yesterday.
Retail traders and whales may have booked their unrealized profits before the price took a plunge since the number of sending addresses has hit an ATL as well, based on data from Glassnode. YFI’s narrative is different from top altcoin Ethereum. Ethereum’s active supply has hit a one-month high.
Altcoins like ADA, DOT, EOS, and BCH are following a similar narrative as YFI, and the trade volume has increased in the past 24 hours for over 4 days in a row. After double-digit gains last week, these alts have double-digit drops. If retail traders are holding on to these alts in their portfolio, it may be best to accumulate more and bring the average down before the price rally begins again.
100x or double-digit gains are not always the only strategy; dollar cost averaging is real, not only for Bitcoin’s but alts like these in the current phase of the market cycle.
In this market, cycle Bitcoin is also playing a key role, and it is likely that the sideways Bitcoin price action may lead to investment flow in alts and DeFi tokens, and there is evidence that this is happening in real-time; WBTC increasing is a clear signal that there is more BTC flowing into DeFi.
Besides, there are more shorts on Deribit and FTX in the past few hours than in the past 4 days, and this could mean that the asset may take a dip before the trend reverses for alts like YFI. Once the liquidation of longs exceeds shorts, (as it historically does before a correction in Bitcoin’s price) the trend is likely to reverse in alts like YFI, ADA, DOT, in the short-term, before a further price drop.
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Published at Thu, 25 Mar 2021 20:30:54 +0000