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Short squeeze alert for January 2024: Two cryptocurrencies with potential to skyrocket

Short squeeze alert for January 2024: Two cryptocurrencies with potential to skyrocket

The cryptocurrency market is experimenting with a retracement on December 26, with Bitcoin (BTC) triggering the drop. This correction comes amid rumors of Mt. Gox finally paying its 10-year creditors from the exchange collapse in 2014.

As the bearish sentiment intensifies, Bitcoin short-sellers are monetarily rewarded with meaningful profits. Therefore, other speculators have increased their short positions, which can further trigger short-squeeze liquidations.

In this context, Finbold retrieved derivatives data from CoinGlass to spot short-squeeze opportunities for January 2024. A short squeeze happens when short-sellers are forced out of their short positions amid a price surge, liquidating these traders and driving the price even higher.

Short squeeze alert for Bitcoin (BTC) in January 2024

Notably, Bitcoin has high-weighted liquidations to the upside in the weekly time frame. In particular, the $44,640 price can quickly become a target for market makers, with $894.76 million worth of liquidations.

BTC weekly liquidation heatmap. Source: CoinGlass

Additionally, there is more than $8 billion worth of liquidations, from $44,000 to $45,000. This attractive floating capital could trigger a series of short squeezes to the leading cryptocurrency in January 2024.

In the meantime, $17.93 billion of short positions were opened in the last 24 hours alone. Bitcoin is currently trading at $42,365, down 3% in the day.

Bitcoin long/short ratio. Source: CoinGlass

Ethereum (ETH)

The second-largest cryptocurrency also threatens to see a short squeeze if bearish traders continue to deploy capital. So far, Ethereum (ETH) has opened $9.17 billion of short positions in the last 24 hours, weighing 52.31% of the daily open interest.

Ethereum long/short ratio. Source: CoinGlass

Nevertheless, the weekly liquidations heatmap for ETH looks more balanced than Bitcoin’s. It is possible to spot $26.76 million of liquidations at $2,310 per token and a relevant weight until $2,400.

BTC weekly liquidation heatmap. Source: CoinGlass

On the other hand, the downward liquidation for Ethereum’s long positions offers a counterpoint and neutral outlook. Market makers could seek both directions, either liquidating bulls or bears in the following weeks.

It is important to say that there are no guarantees that a short squeeze will happen with these cryptocurrencies. Crypto investors must do their own research and consider other data to make profitable financial decisions.

Essentially, a short squeeze fully depends on a market sentiment pivot from bearish to bullish while there are still open positions in the previous direction.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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