What is the difference between short float and short interest in the cryptocurrency market?

1 answers

• LabyrinthJan 22, 2022 · 3 years ago
  In the cryptocurrency market, short float and short interest are two key metrics that can provide valuable insights into market sentiment. Short float refers to the percentage of a cryptocurrency's total supply that is currently being shorted by traders. It indicates the level of bearish sentiment in the market, as shorting involves betting on a price decline. Short interest, on the other hand, represents the total number of short positions open in a cryptocurrency. It gives an idea of the overall market sentiment and the potential for short squeezes. Short squeezes occur when a cryptocurrency's price starts to rise, forcing short sellers to buy back the cryptocurrency to cover their positions, which can further drive up the price. Understanding the difference between short float and short interest can help traders and investors make more informed decisions in the cryptocurrency market.
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