Hifi Finance token price surge triggers record short liquidations
Hifi token price has surged in the past few days, becoming one of the best-performing cryptocurrencies this week. According to TradingView, the token has jumped in the past six straight days and is now hovering at its record high. The little-known cryptocurrency has jumped by more than 490% from the lowest level this year.
Hifi Finance is a blockchain project based in the Polygon ecosystem. The network aims to lead the fast-growing tokenization industry that analysts believe is worth trillions of dollars. It also lets people borrow against tokenized assets like real estate, crypto, and NFTs.
Hifi Finance has inked several partnerships in the past few months. For example, it partnered with Crown Ribbon to take on the performance horse industry. Also, the developers partnere with Pooled NFT, an easy approach to turn any NFT into passive income.
It is not clear why the Hifi crypto price is rising. What is clear is that the surge has triggered the biggest short liquidations on record. Data by CoinGlass shows that the total short liquidations rose to over $854k on Thursday after rising by $476k on Wednesday.
Short liquidations happen when exchanges are forced to close short trades when a price rises. In most periods, these liquidations are usually seen as a bullish thing.
Meanwhile, other data shows that Hifi Finance’s open interest in the futures market rose to a record high. In dollar terms, this open interest rose by more than 377% to more than 57%. This interest is solely from Bybit, one of the biggest exchanges in the industry.
Another reason why the Hifi Finance price is rising is that this is a short squeeze. A short squeeze happens when an asset, often a thinly-traded one like Hifi, surges. As this happens, many short-sellers are punished.
Therefore, it is unclear whether the Hifi token price will continue rising. In most periods, these surges tend to last for a short period.