Crypto Storage Protocol Tokens Slide as Traders Short FileCoin and Storj

Filecoin saw record shorts over the weekend because it's down 28% over the past five days. Storj is down 20% in the same time period.

AccessTimeIconDec 19, 2022 at 7:36 a.m. UTC
Updated Dec 19, 2022 at 4:28 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Short sellers were relentless on the tokens associated with storage protocols Filecoin (FIL) and Storj (STORJ) over the weekend, with record shorts being placed FIL.

FIL is down 28% over the past five days, with STORJ down 20%. Both have underperformed ether (ETH), which is down roughly 10% during the same time period.

FIL and STORJ chart. (TradingView)
FIL and STORJ chart. (TradingView)

Data from CoinGlass points to record liquidations on long positions for FIL and STORJ as last week came to a close.

FIL liquidations (CoinGlass)
FIL liquidations (CoinGlass)
StorJ liquidations (CoinGlass)
StorJ liquidations (CoinGlass)

Nearly $5.7 million long FIL positions were liquidated on Dec. 16, according to CoinGlass, while $365,000 in STORJ long positions were also liquidated. Internet Computer (ICP), a similar protocol, also had $500,000 in long positions liquidated.

Open Interest data from CoinAlyze suggests the worst is yet to come, with an 11% jump in open interest during the last 24 hours to about $52 million. Continued negative funding rates indicate that this money is coming in to short.

Traders might be questioning the utility of storage protocols, which have a massive – and growing – storage capacity but no obvious use case to utilize it.

Filecoin says it has a capacity of 15.34 exbibytes, or 17.6 million terabytes, but lists storage of OpenSea non-fungible tokens (NFT) as one of its primary clients, raising questions about how much of its storage network is truly utilized.

On OpenSea, monthly volume dropped to $159 million from around $4.8 billion at the start of the year, a decline of about 97% and nearly reflective of Filecoin’s decline from $236, when it listed on April 1, to $3 today.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about