As March comes to an end, cryptocurrency traders look for insights on cryptocurrencies with the potential to skyrocket in April. Among valuable indicators, the open interest in the derivatives market hints at possible short squeezes in the following weeks.
In particular, the current domination of short positions could trigger massive liquidations in specific cryptocurrencies, proportionally pumping their prices.
This happens because traders agree upon a liquidation price to open shorts against a cryptocurrency they are bearish with. If the underlying asset reaches the liquidation price, the position is closed through the asset’s repurchase.
For that reason, Finbold gathered data from CoinGlass on March 31 and spotted short-squeeze potential for two cryptocurrencies in April.
Ethereum (ETH)
Notably, the total open interest in Ethereum (ETH) futures is floating at record highs above $13 billion.
ETH Futures open interest in USD. Source: CoinGlass
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