A bearish sentiment is dominating two cryptocurrencies with an increased number of short positions recently opened. If sentiment shifts, short squeezes might become likely events for the next hours or days.
Particularly, the two mentioned cryptocurrencies are Filecoin (FIL) and Uniswap (UNI), with relevant open interest from short-sellers.
In order to evaluate the short squeeze risk and opportunity, Finbold gathered derivative market data from CoinGlass on November 30. Notably, their volume is heavily weighted toward shorts over long positions in both the 12 and 24-hour time frames.
FIL Long/Short ratio on 12 and 24 hours. Source: CoinGlass
Interestingly, FIL was changing hands by $4.38 per token at the time of publication, with 1% losses in the day. This evidences a slightly bearish sentiment, feeding short-sellers greed and creating liquidity upwards through a possible short squeeze.
Moreover, the 24-hour short-positions capitalization is higher than its $90.96 million daily exchanged volume, according to CoinMarketCap.
Filecoin market cap and volume (24h). Source: CoinMarketCap
Uniswap (UNI) could skyrocket with upwards liquidity
Meanwhile, Uniswap has $102.39 million of short positions opened in the last 24 hours (52.42%), against $92.93 million longs. The 12-hour long/short ratio shows 54% of all current open interest betting on a bearish outcome.
UNI Long/Short ratio on 12 and 24 hours. Source: CoinGlass
Like Filecoin, UNI is trading with 1.27% daily losses at $5.93 per token. However, its 24-hour volume is two times the size of its opened short positions in the same time frame.
Uniswap market cap and volume (24h). Source: CoinMarketCap
In this case, the available liquidity is less appealing to trigger a short squeeze and could keep the downtrend for Uniswap. Nevertheless, the high weight against longs could incentivize market makers to hunt shorts despite the proportionally low volume.
It is important to say that there are no guarantees that a short squeeze will happen with these cryptocurrencies. Crypto investors must do their own research and consider other data to make profitable financial decisions.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
