Thursday’s award payments in larger cryptocurrencies are probably the result of a long squeeze or settlement of geared bullish acting rather than a direct bearish attitude.
Coindesk 20 index (CD20) for the largest, most liquid tokens has lost 6.8% over the last 24 hours, with Bitcoin (BTC), the leading cryptocurrency with market value, dropping almost 1% after failing to maintain gains over $ 120,000. Among larger altcoins fell ether (ETH) 3%, XRP (XRP) 13%and Solana’s sun (sun) 8%.
All falls are in line with the bearish signals from technical charts. They are also characterized by falling open interest in the market for offshore eternal futures and positive financing rates.
For example, open interest – the number of troubled contracts in the futures market – for XRP has fallen more than 6% in two days, according to Data Source Velo. It is a sign market participant reduces their exposure and adopts less risky positions.
Open interest in sun, BTC and ETH futures has fallen by 5%, 1.5%and 2%respectively. Velo tracks activity in dollar and USDT-denomined eternal, listed on Binance, OKX, Bybit and other exchanges.
Meanwhile, the financing rates for the four tokens are still positive, indicating a net bias for bullish bets. Positive financing rates indicate that eternity is trading at a prize at the spot price, which requires a periodic payment with longs to shorts to keep their positions open.
A long clamp is largely seen as a necessary and positive event because it “cleanses” the market by flushing excess leverage and over -optimistic long positions.
The combination of falling prices, lower open interest rates and positive financing rates suggest that bullish bets are actively removed from the market.
It excludes the likelihood that the fall in prices is supported by investors taking new short or bearish positions because the financing rate in this case would have fallen on negative territory as the short owners had to pay along.
In addition, the new shorts would have increased open interest rates as prices fell, which is not the case either.
The fall in open interest suggests that dealers are closing their positions, a characteristic of geared lengths that are liquidated or voluntarily leaving the market, rather than new shorts entering the market. Put together it signalizes that while the price is falling, the mood remains rather robust.
