US President-elect Donald Trump’s TRUMP token has caused quite a stir in the cryptocurrency market, quickly becoming the 21st largest digital asset with a market capitalization of $11 billion in just two days.
The TRUMP/USDT pair has become the most traded pair in the last 24 hours on the main exchange, Binance, and represents 13.3% of the total exchange volume, according to Coingecko.
While this activity is exciting, bulls and those looking to join the market ahead of Donald Trump’s inauguration may want to proceed with caution as a key derivatives market indicator has veered bearishly amid growing interest. open token futures.
Open interest in TRUMP perpetual futures has increased 6% in the last 24 hours, according to data source Velo Data. Although prices have fallen from $70 to $58 since Asian time, they are still up 3%.
However, the cumulative perpetual futures volume delta, which reflects the difference between buying and selling volume, has fallen more than 1%, indicating a relative increase in selling volume. In other words, traders are taking short positions or bearish bets or closing long positions.
Additionally, the TRUMP market appears overheated, with longs paying an annualized financing fee of over 170% to shorts to keep their positions open. If the market stops rising, holding long positions will become a burden, which could lead to a withdrawal of bullish bets. That, in turn, could lead to a deeper drop in prices.
The chart shows that most major cryptocurrencies have seen net selling in perpetual futures in the last 24 hours. Perhaps market participants fear market-wide price losses in a classic “sell the fact” action after Trump’s inauguration.
