Shiba Inu open interest has halved, indicating significant changes in market dynamics.
Decline in Shiba Inu Open Interest
Open interest in SHIB futures is approximately $155.83 million, down 50% from its recent peak. This decline indicates that traders are quickly reducing their leverage in preparation for future volatility. A significant drop in this indicator implies many traders are either taking profits, selling their positions, or hedging against risk.
Trading Volume Increase and Neutral Balance
Despite the decline in open interest, SHIB's trading volume has increased by 22.14% to $131.48 million. This shows that although traders are shedding leveraged positions, the spot market remains active. Long and short traders are currently not exhibiting a pronounced directional bias, as the long/short ratio remains near neutral.
Consequences for Volatility and Potential Trend
SHIB recorded $477,000 in 'rekt' trades over the past day, predominantly from long positions. This suggests recent price declines pushed bulls out of their positions, potentially leading to reduced volatility. It may also indicate a price reset opportunity, allowing the creation of new positions at current levels.
SHIB has marginally recovered from recent lows and is currently trading at about $0.00015. If open interest levels off and fresh capital enters the market, a new wave of momentum could emerge in either direction. However, if investors keep withdrawing, SHIB might find it difficult to regain bullish momentum in the near future.
