Greed is again a dominating sentiment after a retracement earlier this week, with most cryptocurrency projects showing bullish signals.
However, data retrieved by Finbold from CoinGlass’s long/short ratio on December 14 shows that a few cryptocurrencies remain dominated by short positions. Considering the sentiment shift, such a scenario in the derivative market could lead to short squeezes.
Particularly, Jito (JTO) and Unifi Protocol (UNFI) record a high weight of short-selling volume. This becomes even more relevant considering both tokens’ relatively low 24-hour volume and market capitalization.
JTO Long/Short ratio on 12 and 24 hours. Source: CoinGlass
In the meantime, JTO has both a $349.13 million market cap and a $330.32 million daily exchanged volume. Very close values to the $319.92 million of opened short positions in the last 24 hours, making it very likely to face a short squeeze at any moment.
Jito market cap and volume (24h). Source: CoinMarketCap
Short squeeze alert for Unifi Protocol (UNFI)
Another likely short-squeeze target is the Unifi Protocol DAO’s token, UNFI. According to CoinMarketCap, its 24-hour volume is just $4 million behind the $48.26 million capitalization.
Unifi Protocol DAO market cap and volume (24h). Source: CoinMarketCap
This shows a notable trading interest rising for UNFI, still heavily weighted towards short positions. Interestingly, there were $21.84 million (53.14%) and $55.28 million (52.21%) of shorts opened in the last 12 and 24 hours, respectively.
Notably, the shorting volume surpasses the tokens exchange volume in the day, while UNFI is up 11.55%, trading at $7.71 by press time. If the price continues in a bullish trend, short-sellers might get massively liquidated, causing a huge impact on its markets.
UNFI Long/Short ratio on 12 and 24 hours. Source: CoinGlass
Essentially, an increased demand causes a high volume of buy orders to liquidate exchange books, pumping the price and triggering derivative contracts for liquidation, driving the price even further.
All things considered, there are no guarantees that a short squeeze will happen with these two cryptocurrencies.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
