These Altcoins Are Being Heavily Shorted On Binance Right Now

The on-chain analytics firm Santiment has pointed out how these three altcoins may be more likely to see price jumps in the coming future.

On-chain analytics firm Santiment has highlighted three altcoins that may be poised for price surges due to a trend observed in their Binance Funding Rate.

The Binance Funding Rate indicates the periodic amount of fees that traders on a derivatives exchange are paying each other. A positive rate signifies that long investors are paying a fee to short holders to maintain their positions, indicating bullish sentiment.

Conversely, a negative rate implies that shorts are outnumbering longs, suggesting bearish sentiment.

Santiment's chart showcases the Binance Funding Rate for Aave (AAVE), The Graph (GRT), and Decentraland (MANA) over the past week.

The rate for all three altcoins has recently turned from green to red, indicating that investors have opened a large number of short positions on Binance for these assets.

Interestingly, this heavy shorting coincides with a rebound in the cryptocurrency market, led by Bitcoin's recovery above $58,000. It seems that derivatives users are skeptical about AAVE, GRT, and MANA continuing the bullish wave.

However, this pessimism could benefit the altcoins' prices. Mass liquidation events typically affect the side of the market with the most positions. Since bearish positions are currently dominant, mass short liquidations are more likely.

When a large number of liquidations occur simultaneously (known as a squeeze), the price can experience a burst of volatility. If these shorts are liquidated, the altcoins could experience significant price jumps, according to Santiment.

Aave's price has been bullish, rising to $147 with an over 11% surge in the last seven days.