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Filecoin has surged seriously higher over the past few days even while Bitcoin has stalled in the $13,000 range.

The price of the leading per data from CoinGecko.

Analysts attribute this rapid Filecoin price action to a “short squeeze,” whereas short positions holders were forced to close their positions in tandem, resulting in a spike in buying volume. Short squeezes often take place when the funding rate of a futures market is extremely negative, forcing investors out of their positions.

Related Reading: Here’s Why Ethereum’s DeFi Market May Be Near A Bottom

Filecoin Surges More Than 50% From Its Lows

From the lows of $21 earlier this week, Filecoin has surged more than 50%. The FIL futures markets were dramatically in the negative prior to the move. That means that shorts had a lot of incentive to close their positions, thus driving the price higher as the shorts are covered.

Even now, hours after the squeeze, the funding rates are still well into the negative. On FTX, those that are shorting FIL are charging -0.2526% every hour, making it expensive to keep those positions open.

Related Reading: Tyler Winklevoss: A “Tsunami” of Capital Is Coming For Bitcoin

Fud Dispelled

This rally comes after the “FUD’ was dispelled over a purported “miner strike” in the Filecoin ecosystem. It was reported extensively online that some Filecoin miners, which maintain the network, were turning off their machines due to an interesting incentive structure.

This has since been dispelled by members of the FIL community. They suggest that miners remain profitable and are proving that they can store users’ file just fine.

Related Reading: 3 Bitcoin On-Chain Trends Show a Macro Bull Market Is Brewing
Featured Image from Shutterstock
Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
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