AXS-USD: Deep Negative Funding Fuels Long Squeeze Threat
AXS-USD is showing strong Long Squeeze potential due to consistently negative funding rates, currently at -6.948% daily on Paradex. A further price drop could trigger significant liquidations and accelerate the downward trend.
Key Metrics
Current Price
$2.376
Funding Rate
-6.9477%
24h Avg FR
-6.9477%
FR Trend
stable
Est. Liquidation Price
$2.02
Take Profit
$2.1388
-15%
Stop Loss
$3.4458
+45%
Max Leverage (No Liq.)
2x
100% ÷ 45% = 2x
Tradeable Exchanges
Analysis
AXS-USD is exhibiting conditions ripe for a Long Squeeze. The current market environment is characterized by a deeply negative funding rate of -6.948% on Paradex, indicating a strong bias towards short positions. This suggests that a significant number of traders are currently paying to hold long positions, making them vulnerable to a price decline.
The high negative funding rate suggests AXS-USD is a prime Long Squeeze candidate. Traders are incentivized to short the asset, and any unexpected dip in price can trigger a cascade of liquidations as leveraged long positions are forced to close. With such high funding, longs are already under pressure, making them susceptible to panic selling.
Key price levels to watch include immediate support around $2.30 and further down near $2.20. Breaching these levels could accelerate the squeeze. Resistance lies around $2.50; a break above this level would likely alleviate some pressure.
While RIVER-USD also exhibits negative funding (-6.724%), the magnitude of negative funding for AXS-USD (-6.948%) and the lack of a specific open interest data point suggest greater long positioning relative to market cap for AXS-USD. This makes it the stronger Long Squeeze candidate currently. A long squeeze on RIVER is less likely in the short term.
Historically, AXS-USD has been prone to volatile price swings, often correlated with sudden changes in market sentiment and leveraged positioning. The current negative funding environment amplifies this volatility.
Risk Assessment
The primary risk lies in a sudden shift in market sentiment or a positive catalyst that could drive AXS-USD upwards, negating the Long Squeeze scenario. A positive announcement regarding the Axie Infinity ecosystem or a broader market rally could trigger short covering and invalidate the thesis.
Warning signs to watch include a significant increase in trading volume accompanied by upward price movement, as this could indicate short covering or new long positions entering the market. Also, a decrease in the funding rate towards positive territory would suggest a weakening of the short bias.
Additional risk factors include unforeseen regulatory announcements, major exchange outages, or a black swan event affecting the broader crypto market. These could disrupt market dynamics and invalidate the analysis.
Trading Strategy
Delta-neutral traders can consider entering a short position on AXS-USD, anticipating a continuation of the downward pressure. Entry could be considered near the $2.45 - $2.50 range, with a stop-loss placed slightly above $2.55 to protect against unexpected upside.
Alternatively, traders can use options to hedge against the potential Long Squeeze. Buying put options with a strike price around $2.20 - $2.30 can provide downside protection while potentially profiting from the anticipated price decline.
Consider taking partial profits as AXS-USD approaches the $2.20 level and reassess the situation based on market conditions and funding rates. A close above $2.55 should be considered a signal to close the position or significantly reduce exposure.
Exchange Data
| Exchange | Price | Funding Rate | Open Interest |
|---|---|---|---|
| Paradex | $2.376 | -0.2895% | - |
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.