Key Points
What Caused BLESS to Drop 44% Despite Bullish Sentiment?
A significant outflow of liquidity in the derivatives market, along with closed contracts and low trading volume, led to the sharp decline.
Is there Hope for BLESS to Recover?
Short-term prospects are bearish, but potential liquidation clusters and strong buying pressure from Binance suggest a possible long-term upside.
BLESS experienced a sudden 44% drop in value at the start of the day, marking one of the most significant losses in the market.
Despite bullish investor sentiment, the liquidity outflow took many by surprise. An analysis by AMBCrypto delved into the reasons behind the decline and speculated on BLESS’s future price movements.
Going Against the Grain
The decline in BLESS’s price stands in stark contrast to the overall bullish sentiment in the market. Interestingly, 82% of investors are bullish on BLESS, according to data from CoinMarketCap.
While a high number of bullish investors typically indicates strong long-term conviction, this has not translated to price gains for BLESS, which continues to hit new lows.
Notably, Binance traders remain among the most bullish, going against the prevailing bearish sentiment.
Source: CoinGlass
At present, Binance’s Long/Short Ratio has been steadily increasing, reaching 1.98 in the past day. A ratio above 1 indicates more buying than selling activity, with higher values reflecting stronger bullish sentiment.
This optimism may be fueled in part by BLESS’s recent launch of Binance Aloha, which allowed for early investment in the asset.
Identifying the Cause of the Price Plummet
AMBCrypto’s investigation traced the decline back to a significant liquidity outflow from the derivatives market.
Despite the buying pressure from Binance traders, overall market volume remains low. The Long-to-Short Ratio currently stands at 0.94, indicating that selling activity outweighs buying.
Source: CoinGlass
The decline coincided with a sharp drop in the Open Interest Weighted Funding Rate, falling from 0.0025% to 0.0014%.
This decrease suggests that a majority of derivative contracts on BLESS were closed, with indications pointing to further closures in the future.
These factors contributed to the significant outflows witnessed by BLESS. If this trend persists, the asset may experience further price declines.
Exploring the Liquidation Map
The liquidation map reveals potential price zones for BLESS.
It identifies three main clusters for short liquidations compared to fewer clusters for long liquidations.
If shorts dominate and the price approaches these clusters, a rally could be triggered, pushing BLESS higher. Conversely, if longs take control, the asset may continue its upward trend towards previous highs.
Source: CoinGlass
Currently, the short-term outlook for BLESS is bearish, while the long-term trajectory appears to favor an upward movement.
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