Plasma Plummets 10%—Is This Critical XPL Support the Last Line Before a Market Shakeup?
You know that feeling when you spot a sneaky pattern that just won’t quit? That’s exactly the vibe Plasma [XPL] is throwing at us right now — dropping a hefty 10.22% in just 24 hours, while whispering secrets of shadowy connections between old liquidation addresses and recent trading activity. It’s like watching a plot twist unfold live, with the altcoin price hovering around $0.06335 and trading volume taking a nosedive by nearly a quarter. The latest funding trace from November 2nd added fuel to the fire, linking November’s liquidation addresses with traders from back in April, though the puzzle pieces don’t quite prove who’s really calling the shots behind the scenes. Remember the wild ride on April 3rd? A dizzying 42% surge followed by a stomach-drop plunge over 40%? Yep, that rollercoaster might just be circling back, dragging leveraged trading fears into the spotlight once again. As traders pull back, slicing open interest by almost 16%, and the funding rate flips negative, the big question emerges: Will XPL hold onto the all-important $0.0600 support, or are the bears gearing up for yet another round? Let’s dig into the drama and dissect what this means for anyone holding skin in the game. LEARN MORE
Plasma [XPL] continued its downtrend, dropping 10.22% over 24 hours, with new discoveries indicating potential connections to earlier liquidations.
At the time of reporting, the altcoin price sat around $0.06335, whereas its spot trading volume decreased by 22.35% to $102.48 million.
The sell-off followed a November 2 funding trace that identified possible connections between November liquidation addresses and April traders.
Investigators reportedly traced the funds through an exchange hot wallet before USDT withdrawals reached addresses associated with November trading.
But the results were not sufficient to prove the common ownership or control of the wallets.
Earlier, on April 3, XPL surged 42% to $0.167 before plunging over 40% within minutes.
Five addresses opened long positions prior to the rally, sold margin during the climb and ended up being liquidated.
Meanwhile, during the initial surge, about $32.99 million in short positions were liquidated.
The suspected connections renewed concerns about leveraged trading activity and its potential impact on XPL.
Open Interest tumbles as traders retreat
XPL derivatives traders significantly reduced their exposure on the latest sell-off, amidst the growing uncertainty in leveraged markets.
Open Interest fell 15.82% to $171.42 million, showing a significant decrease in outstanding positions, according to CoinGlass data.
Likewise, volume in derivatives trading decreased by 8.78% to $203.62 million, reflecting lower activity in futures markets.
The decline in derivatives activity indicated increasing withdrawal from leveraged exposure by traders after the recent volatility.
Such deleveraging may temporarily decrease liquidation risks, but continued selling pressure could still undernine any stabilization attempts.
Caution setting in as XPL funding rate turns negative.
The shift in the derivatives positioning coincided with a significant movement in the XPL’s OI-Weighted Funding Rate.
The metric has generally been positive throughout October but dipped into the negative territory during the recent drop.
On November 3, CoinGlass data showed the OI-weighted funding rate sitting at -0.0019%.
The negative reading meant the shorts were paying longs, suggesting a bearish imbalance in perpetual futures.
Notably, earlier positive funding increases had indicated higher demand for long leveraged positions prior to a decline in sentiment.
However, the latest negative reading came with declining Open Interest, which indicated that traders were reducing their positions as uncertainty increased.
The funding reversal confirmed bearish pressure even though the magnitude of the funding rate was not enough to create significant short pressure.
Can XPL defend its crucial $0.0600 support?
Plasma’s daily technical structure highlighted a sustained bearish structure, with the bears repeatedly pushing the price beaneth established support levels.
Notably, XPL lost the $0.08197 level before breaking below the $0.07250 support, extending its decline toward the crucial $0.0600 lower support.
The MACD indicator meanwhile validated the bearish outlook after dropping below its signal line, while its histogram also slipped to -0.00062, indicating renewed bearish pressure.
More importantly, the token’s Relative Strength Index (RSI) dropped to 34.07, below its moving average of 40.79.
It is important to note that even though the indicator approached oversold territory, the bulls were yet to demonstrate a convincing price reversal.
For now, sellers retained control, leaving the $0.0600 support as the decisive level for XPL’s next move.
Besides, buyers would need stronger demand to prevent another decline and establish a credible recovery around this key support.
Final Summary
- XPL dropped 10.22% as suspected wallet connections renewed concerns about leveraged trading.
- Open Interest fell 15.82%, while bearish indicators threatened XPL’s $0.0600 support.
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