Skip to content

Crypto short squeeze alert: Traders are now shorting these coins

Crypto short squeeze alert: Traders are now shorting these coins

In the recent period, the cryptocurrency market has witnessed a consistent downward trajectory in its market cap, driven by mounting fear and uncertainty.

In response to this prevailing sentiment, traders are seizing the opportunity to short their positions, capitalizing on the ongoing downturn, behavior analytics platform Santiment noted on August 16.

This shift toward bearish sentiment has sparked a chain reaction. Notably, when investors start to bet against the market, it escalates the possibility of liquidations, subsequently leading to a surge in prices, Santiment explained.

“When the crowd begins to bet against markets, it increases the likelihood of #liquidations, causing prices to rise.”

– Santiment wrote.

According to Santiment, the shorting of cryptocurrencies represents a long-awaited signal for bullish investors who are hoping that the market might be poised for a turnaround.

Short squeeze alert?

Santiment’s chart reveals increased shorting activity in several well-known cryptocurrencies, including THORChain (RUNE), VeChain (VET), The Sandbox (SAND), Kava (KAVA), Binance Coin (BNB), Axie Infinity (AXS), and more. 

Cryptocurrencies being shorted by investors. Source: Santiment

The growing short-funding rates suggest a high level of fear, uncertainty, and doubt (FUD). In such an environment, investors are more likely to liquidate their short positions, which could ultimately lead to a ‘short squeeze.’ 

As more short positions are liquidated, the demand for the cryptocurrency surges, driving its price even higher. 

This chain reaction can create a self-perpetuating cycle of rising prices, as panicked short sellers rush to buy and close their positions, amplifying the overall upward momentum in the market. 

Total crypto market cap loses $25 billion as fear takes over

Meanwhile, crypto prices have been trending significantly lower on August 17 due to a notable shift in market sentiment. To be more specific, ‘fear’ seems to be the prevailing emotion among crypto investors, replacing greed.

As a result, the global crypto market cap fell more than 2.1% over the past 24 hours, losing more than $25 billion in market cap, according to CoinGecko. 

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.