Positive Growth in Cryptocurrency Market Capitalization
Meanwhile, the total market capitalization of the cryptocurrency market has reached a 10-day high, totaling $1.614 trillion, with a 1.5% increase recorded for the day. If the total market cap surpasses the highs seen earlier this month, it is highly likely that coins with high short positions will experience short squeezes.
Increased Short Positions in Dogecoin (DOGE) and dYdX (DYDX)
According to open interest data gathered from CoinGlass’s long/short ratio dashboard, Dogecoin (DOGE) and dYdX (DYDX) have seen a notable surge in short positions compared to long positions over the past 12 and 24 hours.
At present, DOGE, the leading meme-based cryptocurrency, is trading at $0.0926, showing a 2.2% increase in the last 24 hours. It is worth mentioning that Dogecoin currently has $514.56 million in open short positions within a 24-hour period, accounting for 51.31% of its total daily open interest. As a result, any liquidation event leading to a short squeeze could have a significant impact on the price of DOGE.
On the other hand, DYDX has experienced a surge in short positions, totaling $188.57 million (53.06%) since December 21. This cryptocurrency is currently being traded at $2.957. Despite this, its 24-hour trading volume stands at a relatively low $132.69 million.
However, for a short squeeze to occur, a shift from bearish to bullish market sentiment is required. It is worth noting that DYDX has undergone significant changes and token migration in recent days, along with the unlocking of over 80% of its circulating supply.
Given these factors, it is important to acknowledge that the occurrence of such events in these cryptocurrencies is not guaranteed. Market conditions and various other factors play a crucial role in determining whether a short squeeze will ultimately take place.