EigenCloud [EIGEN] declined 11% since the start of the day as bears intensified selling pressure and pushed bulls out of the market.
While the decline has occurred, there’s still a massive risk of further downside as the gap between long and short liquidated capital remains unfavorable for a potential rally. There’s a twist, though: Spot investors continue to accumulate the asset as its price declines.
EIGEN selling pressure intensifies
Growing selling pressure from the perpetual side of EIGEN contracts has influenced the decline witnessed over the past day.
The Funding Rate data at press time was negative, with a reading of -0.0050% on the chart. A negative Funding Rate suggests that short positions have largely dominated the perpetual market.
The total capital in the asset’s perpetual market has shrunk notably, dropping by roughly 13% to around $41.13 million.
The decline in capital, coupled with the concentration of positions on the short side, implies there’s a risk of further drops in the near term.
Spot accumulation continues
There’s been continued accumulation of EIGEN in the market over the past couple of days, even as its price has declined.
CoinGlass data showed that more capital flowed out of the market than flowed into it over the past 24 hours.
Capital outflows exceeding inflows mean investors are moving more assets from exchanges into private wallets than they are moving onto exchanges, potentially to hold them for the long term.
In the past 24 hours, the Spot netflow was negative, confirming this accumulation trend, with roughly -$144,250 recorded. Over the past five days, the Spot netflow stood at -$962,000.
This trend, especially given that it has continued even as the price declines, suggests that investors are possibly viewing the price drop as an opportunity to accumulate more of the asset.
Long liquidations dominate
The liquidation gap could weigh heavily on the price and, in fact, warns of a risk of further decline in the near term.
According to CoinGlass data, there has been more long liquidation than short liquidation over the past 24 hours.
Long traders lost $187,520, compared to the $12,910 lost by short traders within the same period. This represents a disparity of approximately 14.5 times.
The Long/Short Ratio, which measures the balance between long and short positions in the perpetual market, shows that selling pressure has dominated, with the ratio dropping to 0.95.
When the reading is below 1, it suggests that short positions outweigh long positions, which could weigh on the asset’s overall price performance.
Final Summary
- EigenCloud declined 11% as negative Funding Rates and a 13% drop in perpetual market capital to $41.13 million pointed to sustained selling pressure.
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Spot netflows remained negative at $144,250 over 24 hours and $962,000 over five days, suggesting continued accumulation despite the price decline.
