$WAL Over 24 hours, WAL rose 48%. Shorts paid a cumulative 2.36% in funding over those 16 hours, but open interest in perpetual futures didn’t fall—instead, it climbed from 144 million tokens to 241 million.
First, I’ll admit I was wrong. Yesterday afternoon, when WAL was at 0.0485, I used the move in August as a comparison and figured that spot holders were locking in prices through futures, so shorts wouldn’t be squeezed and most of the gains would probably fade. Instead, it surged to an overnight high of 0.0679—40% higher than I expected—and is still hovering around 0.0595, with $42.9 million in 24-hour spot volume. The August rally gave back all its gains in a little over a day. This time, 19 hours have passed, and the price is still more than 20% above where it was when I posted.
The position data makes it clear where I went wrong. When hedgers add shorts, the account distribution shouldn’t change much. But from 2 p.m. yesterday until now, the share of accounts net long across the market fell from 56.9% to 42.5%, while the large-account long/short ratio dropped from 1.22 to 0.71. Yet the large-account long/short ratio by position size has stayed between 0.95 and 1.08. Most of the new shorts are from a large number of accounts chasing the move lower—not a handful of traders hedging their positions.
These shorts are most vulnerable to time. Funding is settled every four hours, and the estimate for the noon settlement is still -0.35%. Across six settlements a day, that adds up to just over 2% in funding costs. The futures price is still 0.7% below the index, which suggests shorts are continuing to push it down at a discount. As long as the price doesn’t fall, they keep bleeding. Those who can’t take it anymore have to buy back and close their positions—and that’s what’s pushing the price up.
Technically, momentum is starting to cool. The 1-hour MACD histogram has flipped from +0.00026 to negative, with the latest reading at -0.00036. ATR(14) is 0.0041, meaning hourly volatility is close to 7%. The dip at 8 a.m. reached 0.0555, right around the Bollinger middle band at 0.0561, and held. The lower band is at 0.0462.
This time, I’m taking the opposite view: if 0.0555 holds, the 240 million tokens in open interest look more like fuel, and 0.0679 could be tested again. I don’t hold WAL, and I’m not chasing the move I missed. If the 1-hour candle closes below 0.0555 while open interest keeps rising, then the traders chasing shorts were right—and I’ll admit I was wrong for a second time this round.
#WAL #FundingRate
First, I’ll admit I was wrong. Yesterday afternoon, when WAL was at 0.0485, I used the move in August as a comparison and figured that spot holders were locking in prices through futures, so shorts wouldn’t be squeezed and most of the gains would probably fade. Instead, it surged to an overnight high of 0.0679—40% higher than I expected—and is still hovering around 0.0595, with $42.9 million in 24-hour spot volume. The August rally gave back all its gains in a little over a day. This time, 19 hours have passed, and the price is still more than 20% above where it was when I posted.
The position data makes it clear where I went wrong. When hedgers add shorts, the account distribution shouldn’t change much. But from 2 p.m. yesterday until now, the share of accounts net long across the market fell from 56.9% to 42.5%, while the large-account long/short ratio dropped from 1.22 to 0.71. Yet the large-account long/short ratio by position size has stayed between 0.95 and 1.08. Most of the new shorts are from a large number of accounts chasing the move lower—not a handful of traders hedging their positions.
These shorts are most vulnerable to time. Funding is settled every four hours, and the estimate for the noon settlement is still -0.35%. Across six settlements a day, that adds up to just over 2% in funding costs. The futures price is still 0.7% below the index, which suggests shorts are continuing to push it down at a discount. As long as the price doesn’t fall, they keep bleeding. Those who can’t take it anymore have to buy back and close their positions—and that’s what’s pushing the price up.
Technically, momentum is starting to cool. The 1-hour MACD histogram has flipped from +0.00026 to negative, with the latest reading at -0.00036. ATR(14) is 0.0041, meaning hourly volatility is close to 7%. The dip at 8 a.m. reached 0.0555, right around the Bollinger middle band at 0.0561, and held. The lower band is at 0.0462.
This time, I’m taking the opposite view: if 0.0555 holds, the 240 million tokens in open interest look more like fuel, and 0.0679 could be tested again. I don’t hold WAL, and I’m not chasing the move I missed. If the 1-hour candle closes below 0.0555 while open interest keeps rising, then the traders chasing shorts were right—and I’ll admit I was wrong for a second time this round.
#WAL #FundingRate