📉 The Start of a Dump Can Be Seen Through Premium Index
Most traders spot a dump too late. Once the candle is already moving lower, the entry is often gone or comes with extra risk.
One of the earliest signs of weakness is the Premium Index.
While the market still looks strong, most people focus only on price. Some also watch funding. The issue is that funding often shows the result, while Premium Index can start weakening earlier.
What this looks like in real trading:
Price may still be holding.
The chart may still look fine.
But Premium Index is already fading, and the market is no longer carrying the move with the same strength.
That is where the focus changes. The question is no longer where to add to a long. The question is whether the market is starting to unload.
📍 What to watch:
— Premium Index starts declining;
— price stops extending the impulse cleanly;
— after a sweep, the market fails to hold the level;
— the read is stronger when combined with OI and VWAP.
If premium weakens while price starts to stall, that is no longer the same strength the crowd saw during the impulse. In a strong market, this may end in a slowdown. In a weak market, it often becomes the start of a dump.
In Crypto-Resources, this metric is available in the screeners. We collect Premium Index in one place, and it is free. Sometimes adding it next to price, funding, and open interest is enough to spot early where the market is already starting to crack from the inside.
⚠️ The main mistake is waiting until weakness becomes obvious on the candle itself. By then, part of the move is already gone.
Premium Index is not valuable because it gives a sell signal.
It is valuable because it can show earlier than other metrics that the market is no longer healthy.