Axie Infinity and Bitcoin Cash hold up despite high ratio of shorts

The green light from the US  Securities and Exchange Commission (SEC) for the Bitcoin Spot ETF caused a notable surge among many altcoins, which benefited from an overnight increase in their prices with either new capital inflow or capital rotation. 

Ethereum reached its highest price this 2023, increasing to $2,715 on the first trading day of Bitcoin ETF. 

However, some altcoins such as Axie Infinity (AXS) and Bitcoin Cash (BCH) noted unusual short-selling activity from traders over the weekend. Despite this, AXS and BCH prices climbed between 2% and 3% on Monday compared with the previous day. 

Also read: Bitcoin bears hit pause at $41,700, BTC price likely to begin recovery soon

Axie Infinity, Bitcoin Cash see spike in shorts

According to Santiment data, Axie Infinity and Bitcoin Cash ranked among the slim group of cryptocurrencies that observed a higher ratio of shorts than long positions over the weekend. Market participants were confident of a bounce in most cryptocurrencies, but BCH and AXS emerged as two exceptions. 

Several long positions were liquidated to pay for shorts. Santiment analysts said that this could act as “rocket fuel” for AXS and BCH, pushing their market value. For both assets, a high ratio of shorts was a minor sign of a bounce in prices. 

AXS and BCH prices increased on Monday, climbing nearly 2% and 3%, respectively, on the day. In the past week, AXS rallied 6% while BCH registered nearly 10% gains. 

AXS and BCH shorts exceeded long positions. Source: Santiment 

Other on-chain metrics support price gains for both tokens. AXS supply on exchanges has declined from its January 10 peak of 0.58% to 0.52%, likely indicating a decrease in selling pressure, according to Santiment data. 

AXS supply on exchanges. Source: Santiment 

Meanwhile, Bitcoin Cash’s Market Value to Realized Value (MVRV) ratio dropped to -1.78% on Monday. This indicates that 1.78% of investors who purchased BCH in the past 30 days are currently sitting on unrealized losses. Typically, when MVRV drops between -5.95% and -1.65%, there is a recovery in BCH price, as seen in October, November and December. This metric supports BCH price recovery. 

BCH MVRV ratio (30-day). Source: Santiment 

At the time of writing, AXS price is $7.92, and BCH is exchanging hands at $254.31 on Binance.