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Open interest in Shiba Inu is sharply declining, indicating a significant change in the dynamics of the market. At approximately $155.83 million, open interest in SHIB futures has fallen 50% from its recent peak. This sharp drop indicates that traders are quickly reducing their leverage and closing short and long positions in preparation for future volatility. Indicating the amount of capital invested in the market's open interest is the total number of outstanding derivative contracts.
A significant drop in this indicator implies that a large number of traders are either taking profits, selling their positions or hedging against risk. In the case of SHIB, the decline might be related to price action uncertainty as both long and short traders decided to take a break. In spite of the decline in open interest, SHIB's trading volume has grown by 22.14% to $131.48 million.
This shows that even though traders are getting rid of leveraged positions, the spot market is still very active. But there is not a pronounced directional bias because the long/short ratio stays near neutral. Looking at liquidations, we can see that SHIB had "rekt" trades totaling $477,000 over the previous day, most of which were long positions.
Gamza KhanzadaevThis implies that recent price declines caused bulls to be pushed out of their positions, creating a domino effect. As leveraged traders pull out, SHIB may be in for a period of reduced volatility as open interest nosedives. This also suggests that there may be a possibility of a price reset, which would allow for the creation of new positions at the current levels.
SHIB has marginally recovered from recent lows and is now trading at about $0.00015. A new wave of momentum could emerge in either direction if open interest levels off and fresh capital enters the market. SHIB might find it difficult to regain bullish momentum in the near future, though, if investors keep pulling out.
Tomiwabold Olajide
Godfrey Benjamin
Dan Burgin
Vladislav Sopov