$MAGMA Over the past two days, it’s been dumped from a high of 0.569 to 0.261, a 54% drop, with futures trading volume around $161 million. But on Binance Futures, the proportion of accounts going long has actually climbed from 32% to 62%. The price has been cut in half, and more and more people are trying to catch the bottom.
First, let’s review that trade from October 22. At the time, I said there was still fuel for a short squeeze and that price would test 0.580. I also said that if long accounts rose back above 55% and the price fell below 0.48, the squeeze would be over, with 0.427 in sight. The first part was right: the high reached 0.569. The reversal condition was triggered that very day, but I didn’t see the decline going far enough—price is now at 0.261, nearly 40% below 0.427.
What’s really telling is the positioning over the past two days. Open interest was still 40.45 million coins near the high, then fell to 26.08 million by 12:15 p.m. today—a 35% drop. That suggests most of the shorts from the previous squeeze have already closed at a loss. But from noon until now, price continued to plunge from 0.337 to 0.261, while open interest climbed back from 26.08 million to 27.62 million coins. People are adding longs as the price falls, not cutting positions. These new longs are clustered around an entry cost of 0.26 to 0.33, so every further drop could turn their stop-losses into fresh selling.
The proportion of long accounts has climbed steadily from 32% at the high to 62% now, while the large traders’ long positioning, weighted by position size, has stayed pinned around 52%. More accounts are buying the dip, but the money isn’t really following. The funding rate has been stuck at the 0.005% floor for five consecutive periods, and longs aren’t willing to pay to hold their positions either. The 1-hour RSI has fallen to 18.3, so the market is deeply oversold in the short term and an intraday bounce is possible. But price has already pierced the 4-hour Keltner lower band at 0.291; the next level is the 4-hour Bollinger lower band at 0.231. The 1-hour EMA12 is at 0.343 overhead, having flipped from support into resistance.
My view is that the low at 0.261 won’t hold, and there’s a good chance we’ll test 0.231 again this weekend. Until the proportion of long accounts falls back below 50% and open interest first shrinks to 24 million coins, the dip buyers haven’t been flushed out. I have no position in MAGMA, and I’m not adding to a falling-knife trade like this.
Personal opinion
#MAGMA #FuturesOpenInterest
First, let’s review that trade from October 22. At the time, I said there was still fuel for a short squeeze and that price would test 0.580. I also said that if long accounts rose back above 55% and the price fell below 0.48, the squeeze would be over, with 0.427 in sight. The first part was right: the high reached 0.569. The reversal condition was triggered that very day, but I didn’t see the decline going far enough—price is now at 0.261, nearly 40% below 0.427.
What’s really telling is the positioning over the past two days. Open interest was still 40.45 million coins near the high, then fell to 26.08 million by 12:15 p.m. today—a 35% drop. That suggests most of the shorts from the previous squeeze have already closed at a loss. But from noon until now, price continued to plunge from 0.337 to 0.261, while open interest climbed back from 26.08 million to 27.62 million coins. People are adding longs as the price falls, not cutting positions. These new longs are clustered around an entry cost of 0.26 to 0.33, so every further drop could turn their stop-losses into fresh selling.
The proportion of long accounts has climbed steadily from 32% at the high to 62% now, while the large traders’ long positioning, weighted by position size, has stayed pinned around 52%. More accounts are buying the dip, but the money isn’t really following. The funding rate has been stuck at the 0.005% floor for five consecutive periods, and longs aren’t willing to pay to hold their positions either. The 1-hour RSI has fallen to 18.3, so the market is deeply oversold in the short term and an intraday bounce is possible. But price has already pierced the 4-hour Keltner lower band at 0.291; the next level is the 4-hour Bollinger lower band at 0.231. The 1-hour EMA12 is at 0.343 overhead, having flipped from support into resistance.
My view is that the low at 0.261 won’t hold, and there’s a good chance we’ll test 0.231 again this weekend. Until the proportion of long accounts falls back below 50% and open interest first shrinks to 24 million coins, the dip buyers haven’t been flushed out. I have no position in MAGMA, and I’m not adding to a falling-knife trade like this.
Personal opinion
#MAGMA #FuturesOpenInterest