by US President-elect Donald Trump TRUMP tokens has made quite a splash in the crypto market, quickly becoming the 21st largest digital asset with a market cap of $11 billion in just two days.
The TRUMP/USDT pair emerged as the most traded pair in the last 24 hours on the leading exchange, Binance, representing 13.3% of the total exchange volume, according to Coingecko.
While this activity is exciting, bulls and those looking to join the market ahead of Donald Trump’s inauguration may want to be cautious, as a key derivatives market indicator diverged weakly from bullish. which is open interest of token futures.
Open interest in TRUMP perpetual futures is up 6% in the past 24 hours, according to the data source Velo Date. Although prices have recovered from $70 to $58 since Asian hours, they remain up 3%.
However, the perpetual futures cumulative volume delta, which shows the difference between buying and selling volume, fell by more than 1%, indicating a relative increase in selling volume. In other words, traders are either taking outright shorts or bearish bets or closing out long positions.
Moreover, the market for TRUMP appears to be overheated, with long position holders paying annual funding fees of more than 170% to shorts to keep their positions open. If the market stops rallying, holding the longs will become a burden, potentially prompting an unwinding of bullish bets. That, in turn, could lead to a deeper price slide.
The chart shows that most major cryptocurrencies have experienced net selling in perpetual futures over the past 24 hours. Perhaps, market participants fear market-wide price losses in a classic “sell the truth” action following Trump’s inauguration.
