Cash Cat [CASHCAT] saw a significant gain in the past day as the asset rose roughly 12%, while the broader market entered a recovery phase.
Market dynamics remain uncertain for the most part, and while investors remain largely optimistic about the recent rally, there are still concerns over whether Cash Cat’s gains are likely to be sustained.
Cash Cat Funding Rate drops as short positions build
Tracking the Open Interest-Weighted Funding Rate showed a significant decline between the 11th of October and press time. The Funding Rate has fallen from a high of roughly 0.0441%, a significantly high level, to 0.0089% at the time of writing.
A positive Funding Rate suggests that longs are in control.
Yet, the decline witnessed over the past 24 hours indicates that short positions have been building up during this period. While shorts built their positions, some traders were taking profits in the market, with the perpetual netflow turning negative.
The netflow tracks the flow of capital into and out of the market and shows that roughly $544,000 worth of capital moved out of the market within the past 24 hours.
Capital inflow remains strong
The rise in Open Interest shows that capital flowed into the market over the past 24 hours. OI rose 14% at the time of this analysis, reaching $48.37 million within this period.
Open Interest simply tracks the value of positions in an asset’s perpetual market. It does not indicate whether the asset is bullish or bearish without additional context.
One indicator that helps provide context for this capital is the Long/Short Ratio, a volume tracker for an asset in the perpetual market.
At the time of this report, the ratio stood at roughly 1.05, also suggesting that there was slightly more long volume than short volume in the market.
A different picture
The liquidation data shows that overall losses have remained relatively low, but the market still leans strongly in favor of the bulls.
The total liquidated capital, which represents positions that were forcibly closed within a given period, shows that a total of $7,760 in Cash Cat positions was liquidated in the market.
Long positions accounted for roughly $7,600 of the liquidated capital, compared with short positions, which accounted for a meagre $158 during this period.
This disparity gives bulls the upper hand, although liquidation data alone cannot confirm whether the rally will continue in the short term.
Final Summary
- Cash Cat rose 12% as Open Interest climbed 14% to $48.37 million, while the funding rate fell sharply.
- The Long/Short Ratio stood at 1.05, but rising short positions and negative perpetual netflow raised concerns over the rally’s sustainability.
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