What you need to know
Why did Double Zero drop by 17% in spite of positive news about the listing?
The sharp fall in derivatives prices was triggered by low liquidity and increasing selling pressure on the market.
Does there seem to be any potential for 2Z’s rebound?
Positive funding rates and strong spot-buying indicate a new bullish outlook and the possibility of a recovery.
As of the date this article was written, Double Zero [2Z] The asset, which had been gaining positive attention from the potential Coinbase listing, saw its price plummet by 17% on the last trading day.
According to reports, after the Securities and Exchange Commission issued a “no-action” letter to the exchange, it plans to include the crypto to its list of cryptocurrencies.
It is believed that the market’s activity has been driven by the declining value for perpetual investors. Questions remain about the possibility of an economic downturn.
The market is hit with low liquidity
The low liquidity on the derivatives markets has been a major factor in 2Z’s recent decline.
CoinGlass data At the time of publication, Open Interest had dropped to $46.5 Million.
This capital outflow, along with the decline in price, shows that investors are becoming more concerned and that this asset may experience a further downturn.
CoinGlass
Momentum has however risen dramatically, with a recent high of 297 million dollars. It is clear that volatility has been a major factor in recent losses, and could be affecting any possible recovery.
The Takers Buy/Sell Rate also indicates that there is a strong selling force, with 0.95 reading on the chart.
This is it for 2Z.
A further market analysis indicates that there is still the possibility of a recovery.
In context, the Funding Rate shows that investors who are long-term in nature pay the highest funding charges because they expect the market to go their way.
Coinglass
The Open Interest-Weighted Funding rate indicates that long positions still control the bulk of the liquidity in the derivatives markets.
Chart shows that recent financial turmoil has probably flushed away investors who were holding paper.
The new outlook on a possible price recovery is a result of this shift. There is a growing convergence across the entire market.
Buy a spot grows
In recent hours, the amount of trading on spot markets has increased dramatically. The asset’s highest ever spot purchase was $8.7 Million on October 9.
Interestingly, accumulation from the spot market is higher than total sales recorded in the derivatives market—a difference of around $1.4 million.
CoinGlass
In general, closing derivatives contracts exceeds spot purchases. The higher volume of spot trades indicates that it may be a temporary selloff.
2Z may soon be on the rise with this increasing spot interest.
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Source: ambcrypto.com
