Key Takeaways:
- TRUMP’s perpetual futures open interest has increased by 6% within the last 24 hours.
- A bearish signal is shown via the cumulative volume delta.
- Funding rates suggest an overheated market for TRUMP.
U.S. President-elect Donald Trump’s TRUMP token is making waves in the cryptocurrency market, quickly becoming the 21st largest digital asset with a market cap of $11 billion within just two days.
The TRUMP/USDT trading pair has become the most traded pair over the past 24 hours on Binance, accounting for 13.3% of total exchange volume, according to Coingecko.
Even though this surge is exciting, traders targeting the market before Donald Trump’s inauguration should be cautious, as there’s significant divergence indicated by bearish signs in derivatives markets.
Open interest on TRUMP perpetual futures had increased by 6% in the past 24 hours, per Velo Data, while prices have dipped from $70 to $58 but remain up by 3%.
Contrary to the rising prices, the cumulative volume delta, which measures buying versus selling volume, indicates a drop of over 1%, suggesting a rise in selling activity. This reveals that many traders are either shorting or liquidating long positions.
Additionally, the TRUMP market appears to be overheated, with those holding long positions facing annualized funding rates exceeding 170% to maintain their positions. If the momentum ceases, sustaining these long positions may lead to significant losses, raising the chance of a broader market sell-off.
CVD for major tokens.
The chart indicates that many major cryptocurrencies experienced a net decline in perpetual futures trading recently. This could suggest that market participants anticipate widespread price drops, typical of a ‘sell the fact’ phenomenon following Trump’s inauguration.
