SPX6900 Sees Surge in Short Bets as Market Rally Extends

SPX has extended its gains and risen by another 15% on Monday. This double-digit price hike has made it the market's top gainer over the past 24 hours.

The price of SPX6900 (SPX) has soared since January 1, setting new all-time highs each day. On January 5, the token reached a new peak of $1.56.

Among the top 1000 cryptocurrencies, SPX is the biggest gainer over the past 24 hours, with a 15% gain. This price hike may continue to drive attention, especially among traders looking for quick gains.

However, a closer examination of the market sentiment surrounding SPX raises concerns about a potential price correction in the coming days.

Despite its price increase, SPX futures traders are placing short bets in anticipation of a price dip, which is evident in its Long/Short Ratio. At press time, this ratio is 0.98.

An asset’s Long/Short Ratio compares the number of its long (buy) positions to short (sell) positions in a market. As with SPX, when its value is below one, more traders are betting on the price falling (shorting) rather than rising. If short sellers continue to dominate, this can create downward pressure on the price.

Furthermore, SPX’s weighted sentiment, which measures the overall positive or negative sentiment towards it, confirms this growing bearish bias. At press time, this is -0.84.

A value below one indicates a negative bias in the sentiment surrounding the asset. It means there are significantly more negative mentions than positive mentions, which may impact the asset’s price.

Relative Strength Index (RSI) Shows SPX Is Overbought

On the daily chart, SPX is overbought, as reflected by its Relative Strength Index (RSI), which is at 79.33 as of this writing.

The RSI indicator measures an asset’s oversold and overbought market conditions. It ranges between 0 and 100, with values above 70 indicating that the asset is overbought and due for a correction. Conversely, values below 30 suggest that the asset is oversold and may witness a rebound.

At 79.33, SPX’s RSI indicates that it is heavily overbought, suggesting a potential price correction or reversal may be imminent. If this happens, its price may dip to $1.18.

On the other hand, if the uptrend continues, the SPX6900 price could touch a new all-time high, potentially triggering a short squeeze.