$RSR At noon, a single 1-hour candle surged from 0.00166 to 0.00245, gaining nearly 50%, but the futures funding rate shot straight to -2%. That's Binance's floor for RSR's funding rate—it can't go any more negative.
When the rate hits the floor, it means shorts have to pay longs 2% every 8 hours. If it stays there, that's three settlements a day, so holding a short for one day costs about 6% alone. In other words, the price has to fall more than 6% a day just for shorts to break even. And more people are still willing to pay that price to short: open interest jumped from 1.04 billion tokens to 3.78 billion in two hours, a 3.6x increase, or from $1.72 million to $9.34 million in notional value.
More importantly, who's opening those positions? The large-trader long/short ratio fell from 2.97 to 1.39, while the short share rose from 25% to 42%. The share of accounts net long across the whole market also dropped from 62.5% to 53.3%. Big traders and retail traders are aligned this time, both shifting toward shorts.
One other detail: during the 13:00 hour, spot hit a high of 0.0030, while futures only reached 0.00259. Spot led the rally as futures were held down, with most of the new shorts hitting the futures market against spot buying.
Technically, the 1-hour ATR expanded fivefold, from 0.000019 before the surge to 0.000095. The KDJ J-value is 88, and the price is nearly 20% above the Keltner upper band at 0.00203, so it really is overheated in the short term. 0.00227, the pullback low at 13:00, is the first support; 0.00259 above is the futures high. If the price falls back below 0.00203, this rally will retreat into the channel, and the bears will have won.
When I wrote about MAGIC this morning, I said retail shorts were fuel and that as long as 0.129 held, it could test 0.1445. It's now at 0.1196, so I got this one wrong. Crowded shorts alone don't guarantee a short squeeze. MAGIC's funding rate wasn't extreme then, so shorts weren't feeling the pain. The difference with RSR is the cost: the next settlement is at 16:00, and as long as the price just moves sideways instead of falling, shorts will keep bleeding.
I don't hold RSR, and I'm not chasing it at 0.0024. In my view, the people paying 6% a day to short will give out before the price does.
#RSR #FundingRate
When the rate hits the floor, it means shorts have to pay longs 2% every 8 hours. If it stays there, that's three settlements a day, so holding a short for one day costs about 6% alone. In other words, the price has to fall more than 6% a day just for shorts to break even. And more people are still willing to pay that price to short: open interest jumped from 1.04 billion tokens to 3.78 billion in two hours, a 3.6x increase, or from $1.72 million to $9.34 million in notional value.
More importantly, who's opening those positions? The large-trader long/short ratio fell from 2.97 to 1.39, while the short share rose from 25% to 42%. The share of accounts net long across the whole market also dropped from 62.5% to 53.3%. Big traders and retail traders are aligned this time, both shifting toward shorts.
One other detail: during the 13:00 hour, spot hit a high of 0.0030, while futures only reached 0.00259. Spot led the rally as futures were held down, with most of the new shorts hitting the futures market against spot buying.
Technically, the 1-hour ATR expanded fivefold, from 0.000019 before the surge to 0.000095. The KDJ J-value is 88, and the price is nearly 20% above the Keltner upper band at 0.00203, so it really is overheated in the short term. 0.00227, the pullback low at 13:00, is the first support; 0.00259 above is the futures high. If the price falls back below 0.00203, this rally will retreat into the channel, and the bears will have won.
When I wrote about MAGIC this morning, I said retail shorts were fuel and that as long as 0.129 held, it could test 0.1445. It's now at 0.1196, so I got this one wrong. Crowded shorts alone don't guarantee a short squeeze. MAGIC's funding rate wasn't extreme then, so shorts weren't feeling the pain. The difference with RSR is the cost: the next settlement is at 16:00, and as long as the price just moves sideways instead of falling, shorts will keep bleeding.
I don't hold RSR, and I'm not chasing it at 0.0024. In my view, the people paying 6% a day to short will give out before the price does.
#RSR #FundingRate