During the past week, some altcoins failed to receive valid ratings from investors. In particular, two altcoins took part in the short position of investors. So, traders revealed that they expect a drop for the two altcoins. Here are the details…
These altcoins took a hit over the weekend
Short-selling vendors have been ruthless with storage protocols Filecoin (FIL) and Storj (STORJ) over the weekend. Record short selling positions opened to FIL. The FIL has dropped 28 percent in the last five days. STORJ, on the other hand, fell 20 percent. Both underperformed against Ethereum (ETH), which dropped roughly 10 percent over the same timeframe. Data from CoinGlass shows that liquidations on long positions for FIL and STORJ were recorded as they ended last week.
According to CoinGlass, approximately $5.7 million long FIL positions were liquidated on Dec. On the other hand, the $365,000 long position in STORJ was also liquidated. A similar protocol, Internet Computer (ICP), also had a liquidated $500,000 long position. Open Interest data from CoinAlyze points to approximately $52 million open interest, up 11 percent in the last 24 hours. Which means the worst is yet to come. Continued negative funding rates show that money is out.
What exactly is a short sale?
You may have heard of short selling or short selling positions while listening to investment discussions. But you may not know what it means. Taking a short position is essentially the opposite of investing in something. When you invest, you bet that share prices (in this case, crypto prices) will go up. So that gives you positive wealth growth. When you take a short position, you bet that a company’s stock price will go down.
The utility of Filecoin makes people think
Traders may be questioning the usefulness of storage protocols that have huge and growing storage capacity but have no obvious use case for using it. Filecoin says it has a capacity of 15.34 Exbibytes, or 17.6 million Terabytes. But as one of its primary clients, OpenSea lists the storage of NFTs. This raises questions about how much of the storage network is actually being used.
But the need for storage may come in handy at a time when NFTs or other protocols are rebounding. We just don’t know when that time will come. Monthly volume on OpenSea has dropped to $159 million from about $4.8 billion at the beginning of the year. So there was a drop of about 97 percent. Filecoin, on the other hand, has dropped from $ 236 in the periods when it was on the rise, to $ 3 today. This is almost a reflection of the general market downturn, as we’ve also reported as Kriptokoin.com.