ARK Long Squeeze Imminent: Price DROP Expected Amidst Negative Funding
ARK is showing signs of a potential long squeeze. With a rising price trend and significantly negative funding rates, long positions are likely to take profit, triggering a downward price movement. Monitor closely for a potential price DROP.
Key Metrics
Analysis
ARK is currently trading at $0.25, up 5.45% in the last 24 hours. The average daily funding rate is significantly negative at -11.858%, indicating that shorts are paying longs a substantial amount. The funding rate has remained relatively stable, further solidifying this trend.
The combination of a rising price and a deeply negative funding rate creates a classic long squeeze scenario. As the price increases, longs are incentivized to take profits. When these longs close their positions by selling, it can create significant selling pressure that drives the price down, triggering a long squeeze.
ARK is available for trading on Bybit and MEXC. Bybit's current funding rate is -12.000%, while MEXC's funding rate is -11.716%. These negative funding rates on these exchanges reinforce the potential for a long squeeze. The Open Interest is at $0.47M indicating some degree of market participation, though relatively low.
Key price levels to watch include previous support levels around $0.23 and $0.20. A break below $0.23 could confirm the long squeeze and accelerate the downward movement. A failure to break $0.23 would suggest the squeeze is less likely.
Compared to other candidates like the COIN (-9.019% daily FR, neutral trend, $189.00) and ZK (-5.942% daily FR, rising trend, $0.03), ARK presents a more compelling case due to its stronger rising price trend combined with a substantially more negative funding rate. This increases the likelihood of a rapid profit-taking event by longs.
This long squeeze scenario would be invalidated if the price of ARK continues to rise significantly and the funding rate becomes positive or less negative. Sustained buying pressure could overwhelm the potential selling pressure from profit-taking longs.
Risk Assessment
The primary trigger for a long squeeze will be a significant sell-off by long position holders, leading to a rapid price decline. Monitor trading volume for spikes associated with selling pressure.
Warning signs that the opposite might happen include a reversal in the funding rate to positive territory, indicating increased bullish sentiment. Furthermore, a substantial increase in buying volume that sustains the upward price trend could invalidate the long squeeze thesis. Low open interest can also limit the impact of a potential squeeze.
Key risk factors include unexpected positive news or developments surrounding ARK that could attract new buyers and offset the selling pressure from profit-taking longs. General market sentiment in the crypto space also plays a role; a broader bullish trend could lift ARK along with it, negating the squeeze potential.
Trading Strategy
Delta-neutral traders can consider opening a short position in ARK, anticipating the price DROP, with a stop-loss order slightly above the recent high (e.g., $0.265). Alternatively, consider buying put options to profit from the expected downward movement. A covered call strategy is not recommended due to the expectation of a price DROP. For hedging purposes, buying protective put options would be a viable strategy. Monitor funding rates and trading volume closely. If the funding rate flips positive or buying volume surges, close the short position or unwind the put options position to minimize losses. Consider entry around $0.25 with a target near $0.22 and $0.20.
Exchange Data
| Exchange | Price | Funding Rate | Open Interest |
|---|---|---|---|
| Bybit | $0.247 | -2.0000% | - |
| MEXC | $0.246 | -1.9526% | - |
Disclaimer: This analysis is for informational purposes only and should not be considered as financial advice. Cryptocurrency trading involves substantial risk and may not be suitable for all investors. Past performance is not indicative of future results. Always do your own research before making investment decisions.