Leverage, liquidity & longs: The altcoin rally setup no one sees coming

• Altcoins are displaying a powerful lengthy bias, with over 70% leaning bullish.
• Is the market bracing for a squeeze or a slide?

Two weeks after tagging its all-time excessive, Bitcoin [BTC] is again teasing the $105k mark. It’s a degree that’s change into a stress level for market sentiment. Final time it cracked, BTC slid straight to $100k, and with no confirmed backside but, merchants are on edge. 

Traditionally, this sort of indecision sparks alt rotations as capital appears for short-term upside exterior BTC’s shadow. But, whereas the setup is there, many alts are nonetheless caught within the pink, posting double-digit losses each week.

In response to AMBCrypto, an altseason isn’t right here but, however with BTC in limbo and market construction scaling down, there may simply be sufficient house for sharp-eyed bulls to start out positioning for the following reversal.

Crowded longs trace at imminent market rebalancing

Whereas spot costs stay subdued, the perpetual market is gearing up like one thing massive is coming. 

Throughout the board, over 70% of altcoins are seeing a powerful lengthy bias, and on Binance, the large gamers aren’t holding again. Excessive-cap property have, on common 60%+ of merchants leaning lengthy.

Nonetheless, this isn’t simply random optimism. As an alternative, it appears extra like strategic risk-taking.

Merely put, after final week’s brutal liquidation cascade, merchants appear to be betting on a near-term market rebalancing, eyeing a possible brief squeeze.

Supply: Alphractal

That’s a daring transfer contemplating the current volatility. What if Bitcoin breaks down towards $100k? That’s the situation short-sellers are doubtless positioning for, opening the door for late-arriving shorts to press the draw back.

Nonetheless, if the market holds regular and shrugs off the chop, these late shorts might get squeezed laborious. That’s precisely what the bulls appear to be betting on with all this lengthy publicity throughout alts.

Given the circumstances, it’s a coin flip at this stage, and whichever aspect performs it smarter will set the tone for the following transfer.

Market positions for a strategic altcoin rally

With Bitcoin dominance again above 65%, it’s clear that altcoins are nonetheless taking their cues from BTC. If Bitcoin heads again all the way down to $100k, likelihood is alts will observe swimsuit.

The final drawdown proved it. Whereas BTC dropped 9.6% from its ATH, Ethereum [ETH] posted a sharper 10.25% correction.

The explanation? – Elevated lengthy publicity throughout altcoins amplified draw back stress.

Supply: TradingView (ETH/USDT)

Nonetheless, AMBCrypto lately flagged a key structural shift within the present cycle that makes Bitcoin’s full retrace to $100k much less possible. 

If BTC stabilizes, altcoins couldn’t solely stage a aid rally however doubtlessly lead the rebound, particularly if a brief squeeze accelerates upside momentum.

That’s why this “dip” won’t be one thing to concern. As an alternative, it could possibly be a wise entry level for these trying to catch the following transfer early.