In three days, it dropped by 10%. The cause was an attempt that failed to break through. This sentence contains two pieces of information.
After the asset touched an important resistance level, it quickly fell back. It then continued to drop for three straight days, for a cumulative decline of about 10%. At the same time, the data shows that the open interest dropped noticeably during this downturn, indicating that the price decline came with the unwinding of leveraged positions—not just plain spot selling.
A decrease in open interest that occurs in sync with the price drop usually points to forced liquidation. During the process of being forcibly settled, long positions sell the asset. That selling pressure then pushes the price down further, creating a cascading effect in a short period. Such a process is often more intense—and more abrupt—than changes driven by fundamentals.
To determine whether the move has ended, look at two signals. First, whether open interest can rise again at the new price level. Second, whether the price can hold at the next support zone. The former suggests that capital is willing to take on risk again, while the latter indicates that the sell pressure has been absorbed.
For traders, the value of this kind of structure lies in identifying the stage. When both price and positions decline together, it usually means the adjustment is in the latter half. But confirmation still depends on coordination between trading volume and open interest. Entering before the first rebound often comes at a higher cost than waiting for confirmation. After confirmation, acting costs more, but it is more reliable.
A big drop isn’t unusual—the key is whether the position sizing has retreated.
#永续合约 # Price structure
After the asset touched an important resistance level, it quickly fell back. It then continued to drop for three straight days, for a cumulative decline of about 10%. At the same time, the data shows that the open interest dropped noticeably during this downturn, indicating that the price decline came with the unwinding of leveraged positions—not just plain spot selling.
A decrease in open interest that occurs in sync with the price drop usually points to forced liquidation. During the process of being forcibly settled, long positions sell the asset. That selling pressure then pushes the price down further, creating a cascading effect in a short period. Such a process is often more intense—and more abrupt—than changes driven by fundamentals.
To determine whether the move has ended, look at two signals. First, whether open interest can rise again at the new price level. Second, whether the price can hold at the next support zone. The former suggests that capital is willing to take on risk again, while the latter indicates that the sell pressure has been absorbed.
For traders, the value of this kind of structure lies in identifying the stage. When both price and positions decline together, it usually means the adjustment is in the latter half. But confirmation still depends on coordination between trading volume and open interest. Entering before the first rebound often comes at a higher cost than waiting for confirmation. After confirmation, acting costs more, but it is more reliable.
A big drop isn’t unusual—the key is whether the position sizing has retreated.
#永续合约 # Price structure
