Sunday evening, Avalanche climbed a bit today, but it wasn’t driven by new money.
$AVAX rose from around 8.53 to 8.79 today, up about 3%. OKX futures data looks odd: open interest actually shrank from around $151 million to $146 million, the account long/short ratio fell from 2.2 to 1.86, and longs are closing out, yet the funding rate is still stuck at +0.01% every 8 hours.
In other words: positions are shrinking while the price is rising. This looks more like shorts covering and longs taking profit and rotating, rather than new money coming in. The elevated funding rate shows that the remaining longs are still paying a high price to stay in the trade. The biggest risk with this kind of rally is that the momentum runs out.
My take: as long as open interest isn’t rising and the funding rate hasn’t come down, don’t chase this move. Wait for a pullback and see whether real positions come in.
Do you think this green candle on $AVAX is the start of a move or just a last gasp? Share your reasons in the comments.
$AVAX rose from around 8.53 to 8.79 today, up about 3%. OKX futures data looks odd: open interest actually shrank from around $151 million to $146 million, the account long/short ratio fell from 2.2 to 1.86, and longs are closing out, yet the funding rate is still stuck at +0.01% every 8 hours.
In other words: positions are shrinking while the price is rising. This looks more like shorts covering and longs taking profit and rotating, rather than new money coming in. The elevated funding rate shows that the remaining longs are still paying a high price to stay in the trade. The biggest risk with this kind of rally is that the momentum runs out.
My take: as long as open interest isn’t rising and the funding rate hasn’t come down, don’t chase this move. Wait for a pullback and see whether real positions come in.
Do you think this green candle on $AVAX is the start of a move or just a last gasp? Share your reasons in the comments.