The cryptocurrency market had a significant rally to finish out the week, with major altcoins leading the charge.
All-in-all, the AltDex 100 Index (ALT100), a benchmark index for large-cap cryptocurrencies and tokens, is up nearly 10% over the past week, led by XRP’s massive run-up of around 100% over the same period.
However, despite the rally, two interesting pieces of data have emerged that should play a role in the coming weeks of trading.
First, the price of Bitcoin (BTC) has remained relatively flat over this same period, bumping just a few hundred dollars to $6,600. Given the fact that Bitcoin didn’t rally with its altcoin counterparts, its total market dominance has dropped to 51.8%, down from 58% earlier this week.
This price stability, through both bearish and bullish market activity, could mean that Bitcoin is becoming a more stable asset, as its volatility continues to sit near year-lows. While this might upset some bulls who want to see a significant rally, it ultimately works to improve the health of the ecosystem while calming regulators who are targeting the leading cryptocurrency for its volatility.
Second, the late-week rally appears to have been partially fueled by a short squeeze, as Ethereum (ETH) and Litecoin (LTC) saw a short interest drop of 60% and 44%, respectively, in a matter of hours. However, the short interest on other major cryptocurrencies still remains relatively high.
Bitcoin (BTC) | $211 Million Sold Short
Ethereum (ETH) | $28 Million Sold Short
XRP (XRP) | $12 Million Sold Short
Bitcoin Cash (BCH) | $12 Million Sold Short
EOS (EOS) | $33 Million Sold Short
Litecoin (LTC) | $6 Million Sold Short
This short interest data is indicative that bears are not yet fully phased by the recent rally, which could serve to fuel a bigger short squeeze moving forward. Alternatively, this mounting short pressure could work to drop crypto prices further if bulls cannot capitalize on last week’s momentum.
Investors should watch Bitcoin’s price activity, as well as the short-interest of major altcoins to help find direction in the upcoming week of trading.
Interesting: 5 Major Altcoins Already Seeing Real-World Adoption
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.