The price of SPX soared 50% during Friday’s intraday trading session. This unexpected price rise triggered a wave of short liquidations, leaving many short traders facing substantial losses.
With the SPX token price poised to extend its gains, its short traders could face more liquidations.
SPX Short Traders Record Losses
During Friday’s trading session, the value of SPX jumped 50%, reaching a nine-day high of $1.55. This price rise triggered a significant number of short liquidations in its futures market, totaling $1 million, according to Coinglass data.
Liquidations occur in an asset’s derivatives market when its value changes relative to a trader’s position. In such cases, the trader’s position is forcibly closed due to insufficient funds to maintain it.
Short liquidations occur when traders with short positions are forced to repurchase an asset at a higher price to cover their losses as its value increases. This happens when the price of the asset rises above a critical level, forcing traders who were betting on a decline to exit the market.
Notably, this might not be the end of losses for SPX traders as trading activity continues to grow. This is evidenced by the token’s open interest, which increased by 137% in the last 24 hours. This came amid a 32% rise in the token’s value over the same period.
Open interest tracks the total number of outstanding derivative contracts that have not settled, such as futures or options. When it peaks during a price rally like this, it signals increased market participation and confidence in the upward price movement.
Therefore, if the SPX price uptrend persists, its short traders will suffer more losses.
SPX Price Prediction: Token aims for all-time high
SPX’s 50% rise resulted in a change in the position of its Super Trend indicator. It is now a green line providing dynamic support below the token’s price on the daily chart.
This indicator tracks the direction and strength of an asset’s price trend. It is displayed as a line on the price chart, changing color to signify the current market trend: green for an uptrend and red for a downtrend.
When the price of an asset trades above the Super Trend indicator, it is an uptrend. This indicates that buying pressure is outweighing selling activity among market participants.
If this continues, the price of SPX will rise back to its all-time high at $1.65. However, if the sales begin, the SPX token price will lose its recent gains and could fall to $1.23.
Disclaimer
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