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Trump’s TRUMP Token Makes a Splash in Crypto Market
U.S. President-elect Donald Trump’s TRUMP token has made a significant impact in the crypto market, rapidly becoming the 21st largest digital asset with a market capitalization of $11 billion in just two days.
TRUMP/USDT Pair Dominates Binance Trading Volume
The TRUMP/USDT pair has emerged as the most-traded pair over the past 24 hours on the leading exchange, Binance, representing 13.3% of the total exchange volume, according to Coingecko.
Bulls and Bears Take Note: Market Indicators Diverge
While this activity is exciting, the bulls and those looking to join the market ahead of Donald Trump’s inauguration should exercise caution, as a key derivatives market indicator has diverged bearishly from the token’s rising futures open interest.
Open Interest Rises, but Perpetual Futures Cumulative Volume Delta Falls
Open interest in TRUMP perpetual futures has increased by 6% in the past 24 hours, according to Velo Data. Although prices have retraced from $70 to $58 since the Asian hours, they remain up by 3%. However, the perpetual futures cumulative volume delta, which reflects the difference between buying and selling volume, has dropped by over 1%, indicating a relative increase in selling volume. In other words, traders are either taking outright shorts or bearish bets or closing long positions.
Market Overheating: Longs Pay High Funding Fees
Additionally, the market for TRUMP looks overheated, with those holding long positions paying an annualized funding fee of over 170% to shorts to keep their positions open. If the market stops rallying, holding longs will become a burden, potentially spurring an unwinding of the bullish bets, which could lead to a deeper price slide.
Major Cryptocurrencies Experience Net Selling in Perpetual Futures
The chart below shows that most major cryptocurrencies have experienced a net selling in perpetual futures in the past 24 hours. Perhaps, market participants are fearing market-wide price losses in a classic “sell the fact” action following Trump’s inauguration.
Conclusion
In conclusion, while TRUMP’s token has made a significant impact in the crypto market, investors should exercise caution due to divergent market indicators. The token’s price may be due for a correction, and longs may become a burden if the market stops rallying.
FAQs
Q: What is the current market capitalization of TRUMP’s token?
A: The current market capitalization of TRUMP’s token is $11 billion.
Q: What is the most-traded pair on Binance?
A: The TRUMP/USDT pair is the most-traded pair on Binance, representing 13.3% of the total exchange volume.
Q: What is the current open interest in TRUMP perpetual futures?
A: Open interest in TRUMP perpetual futures has increased by 6% in the past 24 hours, according to Velo Data.
Q: What is the cumulative volume delta for TRUMP perpetual futures?
A: The cumulative volume delta for TRUMP perpetual futures has fallen by over 1%, indicating a relative increase in selling volume.
