Old dog didn't focus on anything else today, just kept an eye on $KLAC, which has dropped 6.71% in the last 24 hours on the on-chain US stock perp. The price touched 245.94, and the order book is much thinner than this morning. I glanced at the funding rate, 0.00066902, which isn't too high but hasn't gone negative yet. After a drop of over six points, the bulls are still paying, and I felt a twinge in my heart; this shows the bulls aren't giving up, still holding their positions and adding to their longs. The worst part is if another bearish candlestick comes in and wipes out the leverage.
Honestly, a -6.71% drop isn't extreme in the tradfi perpetual market, but combined with the OI at 1029.34, it gets interesting. The OI hasn't collapsed with the price, only down by less than 3%, which means positions aren't running away too much; both longs and shorts are battling it out here. I've seen this kind of setup plenty of times: in a downtrend, if positions aren't decreasing, it means either the bears think there's more downside to come and are holding, or the bulls are stubbornly trying to buy the dip. With a positive funding rate, I lean toward the latter, where the bulls are crowded, but the price is still falling, increasing the liquidation risk on the buy side.
The trading volume of 1.99 million is up 40% from the average of the last couple of days; a volume drop isn't a good sign, but it hasn't reached a panic sell-off yet. I took a closer look at the order book distribution, and there's a lot of buy orders in the 230-240 range, like addresses that previously bought around 220 are moving their stop losses down. This pattern reminds me of that wave last December, where it dropped with volume, then went sideways for three days, and finally a bullish candlestick pushed it back up. The difference is that last time the funding rate was negative, and the bears were paying through the nose; this time it's a positive rate, so the script could be different.
The drop in $KLAC didn't have any obvious news driving it; the tradfi_news is empty, purely a game of chips. I judge that if the 245 level can't hold, the next decent support is around 228, which is a dense trading area from the previous low. If it breaks below 230 and the funding rate stays positive, I'm planning to clear out my long positions and flip to a short, testing it with a light position. If it can hold above 240 for more than three days and OI rises back above 1100, I'll consider adding back. Right now, no one is talking about this coin, and I think that's exactly when extreme moves can happen—either a sharp drop to shake out weak hands or suddenly a bullish pull that forces the bears to cover their shorts.
Trading tags:
#BinanceFutures #TradFi #USDⓈM
#KLAC #KLACUSDT $KLAC