Short squeeze alert for November 29: Two cryptocurrencies with potential to skyrocket

Short positions in two cryptocurrencies have risen in the past 12 to 24 hours, indicating a bearish sentiment in the cryptocurrency market; however, this volume may lead to short-squeeze opportunities for bullish traders.

Particularly, Avalanche ($AVAX) and Arbitrum ($ARB) are showing a relevant weight of opened shorts over the total long positions in the derivative market. Both open interest capitalization also accrues for a meaningful amount of each 24-hour spot volume and market cap.

Finbold retrieved this data from CoinGlass on November 28, looking for possible short-squeeze events in a 12 to 24-hour time frame.

Short squeeze alert for Avalanche ($AVAX)

In the last 12 hours, Avalanche registered $127.01 million in long positions and $141.14 million in short positions (52.63%). The 24-hour time frame also saw a similar weight of $274.06 million shorts (52.14%) over the $251.55 million longs.

Interestingly, $AVAX was changing hands by $20.36 per token at the time of publication, with shy daily gains of 0.57%. This divergence of price action and increased shorts interest might create the proper scenario for a short squeeze.

Moreover, the short-positions capitalization accrues for 80% of the $336.23 million daily exchanged volume for $AVAX, according to CoinMarketCap.

Arbitrum ($ARB) short squeeze or bearish signal?

Meanwhile, Arbitrum has $110.22 million of short positions opened in the last 24 hours (53.32%), against $96.49 million longs. The 12-hour long/short ratio is even higher for shorts, with 54% of all interests betting on a bearish outcome.

However, $ARB derivatives are also indicating a divergence with the token’s price action, trading at $1.01 with 1.14% gains in the day. Unlike Avalanche, Arbitrum shorts are 55% of the $198.50 million daily volume.

In this case, the divergence is less likely to start a short squeeze and could represent a trend reversal for $ARB unless sentiment shifts. Nevertheless, the high weight against longs could incentivize market makers to hunt this available liquidity.

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.