Polkadot [DOT] At the time of publication, it had fallen 9.85%. This was a partial reversal of a 35% gain over ten days.
The price remained down, while exchange flows and derivatives positions began to move in the other direction. A sharper question was raised by the split. Did DOT lose demand, or was it merely releasing leverage for another move?
The recovery was supported by several indicators, although Liquidation statistics kept the downside threat alive.
Polkadot to rebound following Funding Rates Flip?
On the 10th September, Polkadot’s funding rate began to decline before going into negative territory. On the morning of the 11th, September the Funding rate had fallen to -0.0033%.
Short positioning increased as DOT dropped.
The Funding rate turned out to be positive later and was 0.0037%.
Positive funding rates meant that longs paid shorts. This suggests a shift in leveraged position to buyers. The price had not yet reflected that shift.
In 24 hours the Long Liquidations were $892.620 compared to only $53,930 for Short Liquidations. This imbalance shows that recent losses still hurt leveraged investors. A recovery in the Funding Rate created space for a price rebound. However, there was no confirmation of this.
Are spot outflows supporting DOT?
Another bullish sign is the spot-market flows.
CoinGlass reports that the DOT has a net negative spot flow of 1,13 million dollars over 24 hour period. Total outflows were approximately $14.33million during that same time frame.
DOT has recorded net outflows totaling approximately $7.09million over seven days. Although withdrawals may not be indicative of long term holding, a negative netflow on the spot can decrease immediately available supply.
Despite this, the daily pattern still showed a persistent trend of withdrawals. The derivatives’ positioning has improved, as the spot tokens have continued to exit exchanges. Now, both signals are moving in the opposite direction of price trends.
Could the DOT price fall to $1.01 or less?
The indicators available did support a possible recovery, but didn’t confirm that DOT is undervalued. Also, they could not show that the drop was a result of a deliberately slowed down search.
The Liquidation Heatmap of the past three days shows a large unfilled cluster at $1.01 or less, which is below today’s price.
This cluster represents an estimated concentration of liquidation. This did not indicate that any orders were awaiting confirmation.
DOT still charged more than the larger, unfilled clusters. If the demand for those areas increases and the Funding rate is positive, they could be priced higher.
DOT’s case for a rebound now relies on avoiding $1.01 while moving to the overhead liquidity groups.
Price has not changed, but position. This gap will be closed by either a recovery of liquidation, or re-liquidation.
Final Summary
- Polkadot flipped its Funding Rate to positive after Long Liquidations attained $892.620.
- Although $1.01 of the downside risk remained, DOT’s Spot Netflow was negative by $1.13million.
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Source: ambcrypto.com
