• Buckle up! ai16z’s price chart is flashing green, boosted by a 16.5% surge as traders pile into long positions.
• The altcoin is witnessing significant demand for bullish bets (long positions), sparking concerns about a potential long squeeze.

ai16z [AI16Z] has been grabbing headlines with a dramatic surge on its price charts over the last 24 hours. It wasn’t just a small bump; the price leaped from a low of $00.129 all the way to $0.157. To put it in perspective, that’s a significant 16.5% climb in a single day!

Adding fuel to the fire, the memecoin’s trading volume also saw a substantial uplift during this rally, jumping by 16.31% to reach a hefty $118.4 million.

Not to be outdone, ai16z’s Open Interest (OI) mirrored this bullish activity, rocketing upwards by 17.8% and hitting $61.19 million. When both trading volume and Open Interest climb together, it’s often a signal that investors aren’t just dabbling—they’re strategically setting the stage, opening positions in anticipation of a significant market move.

Source: Coinalyze

A quick glance at the Long/Short Ratio chart confirms this, revealing that traders are indeed jumping into the market and predominantly opening long positions, betting on further price increases.

Looking closer at futures contracts, we see longs commanding a significant 57.41% share, while shorts hold 42.6%. This dominance of long positions typically signals a wave of optimism among investors, suggesting they anticipate prices to continue their upward trajectory.

Adding to the bullish chorus, the Funding Rate has remained in positive territory for two consecutive days. This is often seen as another strong indicator of prevailing bullish sentiment in the market.

However, the big question remains: Does this rally have staying power, or is it just a fleeting moment?

Is ai16z gearing up for a sustained rally, or are we looking at a classic bull trap?

According to AMBCrypto’s latest market analysis, it appears ai16z buyers are stepping back into the arena, strategically positioning themselves for potential gains.

Source: TradingView

For starters, the Relative Strength Index (RSI) for ai16z has climbed from 41 to 47 at the time of writing. An upward movement in the RSI often indicates a resurgence of buying interest in the market, suggesting that gains are starting to outpace losses.

However, the fact that the RSI is still below the key 50 mark implies that bearish undercurrents haven’t completely disappeared. Breaking through the 50 level would be a stronger confirmation of building bullish momentum.

So, while buyers are indeed returning, they haven’t yet seized complete control, and sellers are still playing an active role in the market dynamics.

Source: CoinGlass

Bull Trap or Launchpad?

That being said, sellers are still present and accounted for. The spot netflow remains positive, which actually indicates that exchange deposits are still outpacing withdrawals.

This kind of pattern is often associated with profit-taking, especially by those who were previously holding positions at a loss and are now using this price bounce as an opportunity to exit. Despite the increase in long positions, this selling pressure is acting to dampen the strength of the current uptrend.

Consequently, the upward momentum seems somewhat fragile at this point.

Considering these mixed signals, it’s reasonable to suggest that ai16z might be caught in a bull trap, raising the possibility of a long squeeze down the line.

Therefore, it’s possible that ai16z could pull back from this recent uptick and retrace towards the $0.146 level. However, if the bulls manage to maintain their current momentum, we could potentially witness the altcoin pushing higher towards $0.160.