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Short squeeze alert for November 21: Two cryptocurrencies with potential to skyrocket

Short squeeze alert for November 21: Two cryptocurrencies with potential to skyrocket

Some cryptocurrencies have seen increased short positions in the last 12 and 24 hours. While this can signal a dominating bearish sentiment in the cryptocurrency market, relevant shorting volume can also create short-squeeze opportunities for bullish traders.

In particular, it is possible to weight short positions capitalization to the asset’s market cap, exchange volume, and long positions. The higher the adjusted amount of short positions against these benchmarks, the higher the bearish sentiment or the short squeeze opportunity is.

Finbold retrieved long/short ratio data from CoinGlass on November 21. Notably, two cryptocurrencies among the index’s top 10 are showing a massive imbalance with high capitalized short positions.

Short squeeze alert for Dogecoin (DOGE)

Dogecoin (DOGE) recently saw a massive surge in its derivatives volume, as reported by Finbold. The previous increased volume continues to affect the memecoin with a huge $718.23 million worth of short positions in the last 24 hours. Meanwhile, DOGE 24-hour-long positions are worth $627.60 million, with a ratio of 53.35% against 46.63%, respectively.

Interestingly, these are higher numbers than XRP long and short positions worth of dollars, which has a larger market capitalization than Dogecoin. DOGE is trading at $0.0771 by press time.

DOGE Long/Short ratio on 12 and 24 hours. Source: CoinGlass

Essentially, the amount of short positions opened in the last 24 hours is higher than the observed $675.70 million of DOGE’s 24-hour spot volume, according to CoinMarketCap. Moreover, these short positions equal 6.5% of its market cap of $10.94 billion, both suggesting that a short squeeze could happen at any time.

Dogecoin market cap and volume (24h). Source: CoinMarketCap

Interestingly, Chainlink (LINK) is another highly weighted cryptocurrency toward short positions and was already featured in our last short squeeze alert for November 17.

However, the short squeeze never happened, which might indicate a predominant bearish sentiment that is fundamentally explained by last week’s news about stablecoins.

After BlackRock’s disclosure of the risks USDT and USDC can bring to Bitcoin (BTC), the BIS published a study about stablecoins. Mainly with a negative bias, affecting Chainlink’s performance due to its dependency on this asset class.

Nevertheless, the $589.77 million short positions opened in the last 24 hours continue to offer relevant risks of a short squeeze for LINK. This amount results in 52.51% of shorts.

LINK Long/Short ratio on 12 and 24 hours. Source: CoinGlass

Additionally, Chainlink’s $7.94 billion market cap and $649.87 million exchange volume increase the relevancy of the current bearish sentiment, which traders could explore with a short squeeze.

Chainlink market cap and volume (24h). Source: CoinMarketCap

It is important to say that there are no guarantees that a short squeeze will happen with these cryptocurrencies, as previously demonstrated with Chainlink. 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.

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