Following the US Securities and Exchange Commission’s (SEC) approval of the Bitcoin Spot ETF, a significant surge was noted among many altcoins. This surge was driven by new capital inflow or capital rotation, benefiting from the increased interest in cryptocurrencies.
Ethereum, for instance, reached its highest price of 2023, climbing to $2,715 on the first trading day following the Bitcoin ETF announcement.
However, certain altcoins like Axie Infinity (AXS) and Bitcoin Cash (BCH) experienced an unusual amount of short-selling activity from traders over the weekend. Despite this, both AXS and BCH demonstrated resilience, with their prices climbing between
2% and 3% on Monday compared to the previous day. This trend is particularly notable in the South African crypto market, where investor interest has been steadily growing.
Santiment data revealed that Axie Infinity and Bitcoin Cash were among a few cryptocurrencies that saw a higher ratio of shorts than long positions over the weekend. Despite the market expecting a bounce in most cryptocurrencies, BCH and AXS stood out as exceptions.
Several long positions in these altcoins were liquidated to fund shorts. Analysts from Santiment suggested that this could act as a catalyst for AXS and BCH, potentially boosting their market value. For both assets, a high ratio of shorts signaled a minor price bounce.
On Monday, AXS and BCH prices increased nearly 2% and 3%, respectively. Over the past week, AXS rallied by 6%,
while BCH registered gains of nearly 10%. These price increases align with other on-chain metrics indicating positive movements for both tokens.
Notably, the AXS supply on exchanges declined from its January 10 peak of 0.58% to 0.52%, suggesting a decrease in selling pressure. For Bitcoin Cash, the Market Value to Realized Value (MVRV) ratio dropped to -1.78% on Monday, indicating that 1.78% of investors who purchased BCH in the past 30 days are experiencing unrealized losses. Historically, a drop in MVRV between -5.95% and -1.65% has been followed by a recovery in BCH price.
At the time of writing, AXS is trading at R147.79 (USD 7.92), and BCH is exchanging hands at R4745.42 (USD 254.31) on Binance. These trends in AXS and BCH prices are significant for South African investors, showcasing the resilience of certain altcoins in the face of market adversity and high short interest.
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