After a long period of time, enthusiasm and greed dominate the cryptocurrency markets. Most investors are expecting further growth, and speculation is increasing about the possibility of a bull run for Bitcoin (BTC) and altcoins in the coming days.
Despite all the recent cryptocurrency events, there has been an increase in short positions lately. It is believed that the increasing short positions in dYdX and LINK indicate a rising downward trend. However, if the overall positive sentiment is re-established, these two significant coins may experience a noticeable increase.
Current Situation of dYdX (DYDX)
Interestingly, dYdX has now completed a token migration to its own chain. With the unlocking of a large amount of tokens in DYDX, an increase in short positions has also been observed.
Those shorting DYDX have attracted attention by opening positions of $173.84 million (54.46%) in the last 12 hours and $301.98 million (53.73%) in one day. Meanwhile, the token is trading at $2.95, down 4.41% at the time of writing.
The total increase in open interest in short positions is 1.37 times higher than the coin’s 24-hour volume of $220.29, representing 34.27% of DYDX’s market value, which is considered a significant reflection of the token’s value. Being one of the coins with the largest long/short position ratios in the market, DYDX may be an attractive candidate for short position squeeze and price increase.
Future of Chainlink (LINK)
Given that Chainlink is used by many protocols in the decentralized finance (DeFi) space, it is another attractive candidate. Essentially, a global bull market could increase demand for its solution by reversing the current downward dominance.
The created $675.07 million short position (52%) in the last 24 hours is significant. Even more striking is the $331.54 million position opened in the last 12 hours. Meanwhile, at the time of writing, LINK is trading at $15.62.
These represent a significant majority compared to the $802 million volume that has increased by 51% as of December 7. LINK currently has a market capitalization of $8.7 billion. Increased demand for altcoins may pave the way for the expected short squeeze.
All in all, despite all the emerging situations, a guarantee cannot be given that there will be a short squeeze in cryptocurrencies.
