Short markets assist in price discovery but increase short-term heteroscedasticity.  If you want near-term price stability you don't like the short market. If you want the central tendency to be as precise to the demand curve price as possible, and short-term volatility is no concern, then you like short markets.  Here I am ignoring high-frequency trading, and considering only investment impact. 

XMR will need to stabilize to be a good unit of account, or even a good transmission of value mechanism.  That cannot happen until price discovery is more efficient -thus- It cannot happen until the discounting rate stabilizes  -thus- It cannot happen until one heck of a lot of drama has played out.  In the long run short markets will be an aid to stability, once the market cap and exchange volume are much larger than any potential squeeze.  Meanwhile we can try to front-run squeezes, both long and short, when they occur, or we can look past them.