Crypto analysis platform AMBCrypto predicts that higher funding rates and accumulated liquidity could influence the altcoin’s rise.
Yesterday, the price of Bitcoin (BTC) decreased by 9 thousand dollars. Almost $1 billion was wiped from the crypto market due to the decline in demand. Bitcoin’s fall has had a negative impact on altcoins, which have attracted a lot of attention recently. Many altcoins lost close to 10 percent of their value while BTC fell to $9,000.
AMBCrypto has warned that the November 5 crash could happen again. In an analysis published under the title “Altcoins on the Cliff”, the price movements of the last three months were mentioned.
Altcoin growth is at risk.
Altcoins, which have been on the rise since November, have reached their highest funding rate in the past nine months. According to analysis by AMBCrypto, altcoins are at risk of liquidation.
The following statements were included in the analysis.
“Under current market conditions, investors may face prolonged liquidity.”
The constant 30-day futures funding rate reaching monthly levels of 4 to 6 percent indicates that risk appetite is increasing and the use of higher leverage is on the rise.
Historical data shows that sharp price increases and rising funding rates often precede reforms. In a similar scenario that last happened in January, altcoins fell 15 percent. The analysis emphasized that a new correction is at the door.
Advising investors to exercise more caution in the coming days, AMBCrypto noted the following;
“High rate of altcoin funding could lead to evaporation of millions of dollars.”
Altcoin funding rates are at their peak.
According to data from CoinGlass, the 30-day funding rate on permanent futures has reached its highest level of the year. Traders who go long pay a monthly funding fee of 4 to 6 percent to maintain their leveraged positions.
Stating that even experienced traders cannot afford to pay high funding fees, AMBCrypto said selling pressure could increase if crypto prices stagnate or fall.
The analysis predicts that the most vulnerable altcoins in the potential decline will be XRP and ADA.
This article does not contain investment advice or recommendations. Every investment and trading venture involves risk, and readers should do their own research when making decisions.
