$Q Recap: Two rounds of short squeezes are over, price is back where it started yesterday, but the positioning has changed
Market: Perpetual Q is now around 0.13, up about 9% over 24h, but that figure masks what happened along the way: the daily high was 0.2168, the low was 0.0871, and the range was more than 100%. 24h volume was about 94 million U. Funding was -0.064%/4h (-0.087% at the 16:00 settlement), so shorts are still paying. An overseas weekly roundup named Quack AI (Q) the biggest gainer of the week. I couldn't find any new announcements from the project team, so I'm still treating this as a flow-driven move.
First, let's check yesterday's 14:48 post. I marked 0.0956 as the dividing line between bulls and bears, and said to watch for 0.153 if price reclaimed 0.138. I said my read would be wrong if all three of these happened at once: a high-volume break below 0.0956, funding turning positive, and contract count recovering. The move unfolded in three stages:
First, yesterday between 17:00 and 18:00, about 16.4 million U in volume took price from 0.135 down to 0.0871, so 0.0956 was indeed broken. But contract count fell from about 463,000 to 422,000 during that stretch, with about 77,000 U in long liquidations, while funding remained negative. Only one of the three conditions was met. At 19:00, about 7.86 million U of hourly volume brought price back to 0.109. That was a deleveraging flush; the structure hadn't broken down.
Second, funding turned positive at three settlements between 00:00 and 08:00 today (+0.004% to +0.005%). From 01:00 to 08:00, price moved sideways on declining volume between 0.109 and 0.123, with about 500,000–1.1 million U per hour. Contract count fell from 439,000 to 388,000. The funding condition appeared, but contract count didn't recover, so this didn't qualify as a trigger either.
Third, a second short squeeze took place from 10:00 to 13:00. About 26.6 million U over four hours pushed price from 0.1086 to 0.2168. At 13:00, short liquidations were about 152,000 U, the most in this 30-hour period. Price broke through 0.138 and 0.153 at 11:00. My directional read was right, but the recap only said to watch for 0.153; it didn't say what to do after price got there. That's the gap in my analysis.
Then came the pullback: the 5-minute candle at 13:55 had about 3.59 million U in volume, pushed price to 0.2168, and closed back at 0.184. From 14:00 to 15:00, about 19.9 million U took price steadily back to 0.1155. Long liquidations totaled about 91,000 U from 14:00 to 16:00. Price is now around 0.13, almost exactly where it was yesterday when I posted: 0.1293.
Price is back where it started, but positioning has changed:
Open interest in U terms was about 7.57 million U at 13:00, versus about 4.75 million U now, down nearly 40%. Contract count is about 379,000, close to the 370,000 before this morning's rally began. Most of the positions added during the second round have now been unwound.
The long-to-short account ratio has risen from 0.34 at 13:00 to 0.75 now, its highest level in this 30-hour period. Yesterday, the number of accounts opening shorts was two to three times the number opening longs; now it's only about 30% higher.
A few observations:
First, the fuel for the short squeeze has mostly burned out. The share of short accounts has fallen significantly. For a third round, new shorts would need to enter first, which seems unlikely in the short term.
Second, accounts buying the dip are increasing, but funding remains negative and price hasn't recovered. That suggests there are plenty of dip-buying accounts, but they're not putting in much capital. 0.16 (near the 14:00 close) is the first resistance above.
Third, price held around 0.1155 twice, at 15:00 and 16:00. That's today's new floor.
Conclusion: I expect consolidation between 0.1155 and 0.16 from here. I won't chase or buy the dip; I'll just keep tracking it.
What would prove me wrong:
If price moves above 0.16 and contract count starts rising again, that would point to a third round, meaning my assessment of the remaining fuel was wrong;
If price breaks below 0.1155 while the account ratio keeps rising, that would mean dip-buying accounts are adding to losing positions. In that case, the range thesis is invalid too; I'd look back to 0.0956 and yesterday's 0.0871.
One more note on $BTW from the post I made early this morning: I said open interest was falling and longs were closing. Instead, price rose between 03:00 and 06:00 to 2.524, about 13% above the price when I posted. My directional read was wrong from the start. It's now around 2.20, back where it started, and 2.08 hasn't broken. I read too much into falling open interest and called the direction too early. Logging that one.
For review purposes only; this is not advice.
Market: Perpetual Q is now around 0.13, up about 9% over 24h, but that figure masks what happened along the way: the daily high was 0.2168, the low was 0.0871, and the range was more than 100%. 24h volume was about 94 million U. Funding was -0.064%/4h (-0.087% at the 16:00 settlement), so shorts are still paying. An overseas weekly roundup named Quack AI (Q) the biggest gainer of the week. I couldn't find any new announcements from the project team, so I'm still treating this as a flow-driven move.
First, let's check yesterday's 14:48 post. I marked 0.0956 as the dividing line between bulls and bears, and said to watch for 0.153 if price reclaimed 0.138. I said my read would be wrong if all three of these happened at once: a high-volume break below 0.0956, funding turning positive, and contract count recovering. The move unfolded in three stages:
First, yesterday between 17:00 and 18:00, about 16.4 million U in volume took price from 0.135 down to 0.0871, so 0.0956 was indeed broken. But contract count fell from about 463,000 to 422,000 during that stretch, with about 77,000 U in long liquidations, while funding remained negative. Only one of the three conditions was met. At 19:00, about 7.86 million U of hourly volume brought price back to 0.109. That was a deleveraging flush; the structure hadn't broken down.
Second, funding turned positive at three settlements between 00:00 and 08:00 today (+0.004% to +0.005%). From 01:00 to 08:00, price moved sideways on declining volume between 0.109 and 0.123, with about 500,000–1.1 million U per hour. Contract count fell from 439,000 to 388,000. The funding condition appeared, but contract count didn't recover, so this didn't qualify as a trigger either.
Third, a second short squeeze took place from 10:00 to 13:00. About 26.6 million U over four hours pushed price from 0.1086 to 0.2168. At 13:00, short liquidations were about 152,000 U, the most in this 30-hour period. Price broke through 0.138 and 0.153 at 11:00. My directional read was right, but the recap only said to watch for 0.153; it didn't say what to do after price got there. That's the gap in my analysis.
Then came the pullback: the 5-minute candle at 13:55 had about 3.59 million U in volume, pushed price to 0.2168, and closed back at 0.184. From 14:00 to 15:00, about 19.9 million U took price steadily back to 0.1155. Long liquidations totaled about 91,000 U from 14:00 to 16:00. Price is now around 0.13, almost exactly where it was yesterday when I posted: 0.1293.
Price is back where it started, but positioning has changed:
Open interest in U terms was about 7.57 million U at 13:00, versus about 4.75 million U now, down nearly 40%. Contract count is about 379,000, close to the 370,000 before this morning's rally began. Most of the positions added during the second round have now been unwound.
The long-to-short account ratio has risen from 0.34 at 13:00 to 0.75 now, its highest level in this 30-hour period. Yesterday, the number of accounts opening shorts was two to three times the number opening longs; now it's only about 30% higher.
A few observations:
First, the fuel for the short squeeze has mostly burned out. The share of short accounts has fallen significantly. For a third round, new shorts would need to enter first, which seems unlikely in the short term.
Second, accounts buying the dip are increasing, but funding remains negative and price hasn't recovered. That suggests there are plenty of dip-buying accounts, but they're not putting in much capital. 0.16 (near the 14:00 close) is the first resistance above.
Third, price held around 0.1155 twice, at 15:00 and 16:00. That's today's new floor.
Conclusion: I expect consolidation between 0.1155 and 0.16 from here. I won't chase or buy the dip; I'll just keep tracking it.
What would prove me wrong:
If price moves above 0.16 and contract count starts rising again, that would point to a third round, meaning my assessment of the remaining fuel was wrong;
If price breaks below 0.1155 while the account ratio keeps rising, that would mean dip-buying accounts are adding to losing positions. In that case, the range thesis is invalid too; I'd look back to 0.0956 and yesterday's 0.0871.
One more note on $BTW from the post I made early this morning: I said open interest was falling and longs were closing. Instead, price rose between 03:00 and 06:00 to 2.524, about 13% above the price when I posted. My directional read was wrong from the start. It's now around 2.20, back where it started, and 2.08 hasn't broken. I read too much into falling open interest and called the direction too early. Logging that one.
For review purposes only; this is not advice.