SPX Short Traders Record Losses as Token's Price Rocked by 50% Surge

SPX's price rocketed by 50% during Friday's intraday trading session. This unexpected price jump triggered a wave of short liquidations.

SPX’s price experienced a 50% surge during Friday’s intraday trading session, reaching a nine-day high of $1.55. This price increase triggered a wave of short liquidations in its futures market, amounting to $1 million, as reported by Coinglass.

When an asset’s value moves against a trader’s position in the derivatives market, their position is forcibly closed due to insufficient funds to maintain it, a process known as liquidation.

In the case of short liquidations, traders who bet on an asset’s decline are forced to buy it back at a higher price to cover their losses as its value increases. This occurs when the asset’s price reaches a critical level, prompting traders who were expecting a decline to exit the market.

However, with SPX’s trading activity continuing to rise and its open interest increasing by 137% in the past 24 hours, more losses may be in store for its short traders. This surge in open interest coincides with a 32% increase in the token’s value during the same period.

Open interest represents the total number of outstanding derivative contracts, such as futures or options, that have not been settled. When it spikes during a price rally like this, it indicates increased market participation and confidence in the upward price movement.

As such, if the SPX price uptrend continues, its short traders will incur more losses.

SPX’s 50% surge has also shifted the position of its Super Trend indicator, which now appears as a green line offering dynamic support below the token’s price on the daily chart.

This indicator tracks the direction and strength of an asset’s price trend and is displayed as a line on the price chart. The color of the line signifies the current market trend: green for an uptrend and red for a downtrend.

When an asset’s price trades above the Super Trend indicator, it is in a bullish trend, indicating that buying pressure is stronger than selling activity among market participants.

If this bullish momentum continues, SPX’s price will likely rally to revisit its all-time high at $1.65. On the other hand, if selloffs begin, the SPX token price will lose its recent gains and could drop to $1.23.