$MET pulled back from 0.5468 yesterday at noon to 0.419, a drop of 23%. Yet retail traders in the futures market are going increasingly long as the price falls: the proportion of accounts going long has risen from 41.9% at 9 p.m. yesterday to 54.8% now.
Now let’s look at open interest. During yesterday’s rally, open interest climbed from 19.76 million to 44.02 million tokens, while the funding rate stayed negative for several periods, bottoming at -0.51%—a classic short squeeze pushing the price higher. After that, open interest steadily fell to 29.87 million tokens, down by more than 30%. Those were shorts taking profit and closing out. The funding rate also narrowed from -0.45% to -0.016%, meaning the fuel for the short squeeze has largely run out.
The shorts have left, and retail longs have taken their place. Meanwhile, the top traders’ long/short position ratio has actually fallen from 1.20 to 1.14, so big money hasn’t followed suit and bought the dip.
The indicators tell a similar story: the 4-hour MACD histogram has steadily shrunk from 0.0115 to 0.0008 and is about to cross below zero. The 4-hour KDJ’s J value has already fallen to 1.7, with the K line below the D line.
The structure is clear: 0.455–0.459 is where the price failed to break through twice today. Below, 0.4072 is the low it just hit today, and further down is the 4-hour EMA20 at 0.403. The two levels are almost on top of each other, making this the area where long positions’ stop-losses are most concentrated. The daily EMA20 is still at 0.334, far below the current price.
I don’t hold MET, and I’m neither buying nor shorting at this level. In my view, the rally was driven by short covering, and retail traders are now buying in. With this setup, 0.403–0.407 looks more like a level that’s about to be broken than a bottom. I’ll take another look once the proportion of long accounts drops below 45% and open interest stops falling.
Personal opinion
#MET #Futures open interest
Now let’s look at open interest. During yesterday’s rally, open interest climbed from 19.76 million to 44.02 million tokens, while the funding rate stayed negative for several periods, bottoming at -0.51%—a classic short squeeze pushing the price higher. After that, open interest steadily fell to 29.87 million tokens, down by more than 30%. Those were shorts taking profit and closing out. The funding rate also narrowed from -0.45% to -0.016%, meaning the fuel for the short squeeze has largely run out.
The shorts have left, and retail longs have taken their place. Meanwhile, the top traders’ long/short position ratio has actually fallen from 1.20 to 1.14, so big money hasn’t followed suit and bought the dip.
The indicators tell a similar story: the 4-hour MACD histogram has steadily shrunk from 0.0115 to 0.0008 and is about to cross below zero. The 4-hour KDJ’s J value has already fallen to 1.7, with the K line below the D line.
The structure is clear: 0.455–0.459 is where the price failed to break through twice today. Below, 0.4072 is the low it just hit today, and further down is the 4-hour EMA20 at 0.403. The two levels are almost on top of each other, making this the area where long positions’ stop-losses are most concentrated. The daily EMA20 is still at 0.334, far below the current price.
I don’t hold MET, and I’m neither buying nor shorting at this level. In my view, the rally was driven by short covering, and retail traders are now buying in. With this setup, 0.403–0.407 looks more like a level that’s about to be broken than a bottom. I’ll take another look once the proportion of long accounts drops below 45% and open interest stops falling.
Personal opinion
#MET #Futures open interest