AUCTION Primed for Long Squeeze: -12% Funding Rate Signals Trouble
AUCTION is showing significant signs of a potential long squeeze. With a deeply negative and stable funding rate of -12.000% and $5.04M in open interest, leveraged longs are paying a hefty price to maintain their positions, making it vulnerable to a price correction.
Key Metrics
Current Price
$6.516
Funding Rate
-12.0000%
24h Avg FR
-12.0000%
FR Trend
stable
Open Interest
$5.04M
Est. Liquidation Price
$5.539
Take Profit
$5.8644
-15%
Stop Loss
$9.4482
+45%
Max Leverage (No Liq.)
2x
100% ÷ 45% = 2x
Tradeable Exchanges
Analysis
Current market conditions suggest a possible overextension of long positions in AUCTION. The average daily funding rate is a staggering -12.000%, indicating that long positions are heavily incentivized to close. This is further compounded by an open interest of $5.04M, reflecting a substantial number of leveraged positions.
AUCTION is a prime long squeeze candidate due to this funding rate disparity. The high cost of maintaining long positions on Bybit (-12.000% funding rate) is unsustainable in the long run. Any negative price action will likely trigger a cascade of liquidations as over-leveraged longs are forced to cover their positions.
Key price levels to watch include psychological support at $6.00 and the recent low of $5.50. A break below $5.50 could accelerate the squeeze. Resistance lies at the current price of $6.52 and then the previous high of $7.00.
Compared to other candidates like NOM (-7.910% daily FR, $0.02) and ZKC (-6.781% daily FR, $0.18), AUCTION exhibits a much more extreme funding rate imbalance. While NOM and ZKC show negative funding, AUCTION's -12.000% highlights the severity of the over-leveraged long positions.
There isn't specific historical data immediately available for this analysis, but generally, tokens with consistently high negative funding rates are prone to long squeezes, especially when the market sentiment shifts negatively.
Risk Assessment
The primary risk is a sudden shift in market sentiment. If the broader crypto market rallies significantly, longs may find renewed confidence, negating the squeeze. Another risk is whales entering long positions, absorbing the selling pressure and artificially propping up the price.
Warning signs that the long squeeze is not materializing include sustained positive price action despite the high negative funding rate, a significant increase in open interest without a corresponding price drop, and unusually high trading volume suggesting manipulation. A move back above $7.00 would be a strong signal that the squeeze is unlikely.
Furthermore, changes in Bybit's funding rate calculation or potential interventions from the exchange could disrupt the anticipated squeeze. Always manage risk appropriately using stop-loss orders and position sizing.
Trading Strategy
For delta-neutral traders, consider a short position on AUCTION, aiming for an entry around $6.50-$6.60. Set a stop-loss order just above the previous high of $7.05 to manage risk. Target a take-profit level near $5.50 initially, potentially adjusting lower if the squeeze intensifies. Alternatively, buying put options with a strike price near $6.00 could offer a hedged approach. Remember to size your position appropriately, given the volatility.
Exchange Data
| Exchange | Price | Funding Rate | Open Interest |
|---|---|---|---|
| Bybit | $6.516 | -2.0000% | - |
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.