AXS-USD Primed for Potential Long Squeeze: Funding Rates Signal Downside Risk
AXS-USD is exhibiting strong indicators of a potential long squeeze. With a consistently negative funding rate and a low price, traders should monitor for further downside pressure and potential cascade liquidations.
Key Metrics
Current Price
$2.49
Funding Rate
-6.9061%
24h Avg FR
-6.9061%
FR Trend
stable
Est. Liquidation Price
$2.117
Take Profit
$2.2411
-15%
Stop Loss
$3.6107
+45%
Max Leverage (No Liq.)
2x
100% ÷ 45% = 2x
Tradeable Exchanges
Analysis
Current market conditions reveal a bearish sentiment surrounding AXS-USD, evidenced by its current price of $2.49. The average daily funding rate is a significant -6.906% on Paradex, signaling a strong imbalance between long and short positions. A stable, but highly negative funding rate suggests that shorts are paying a hefty premium to maintain their positions, increasing the likelihood of a long squeeze if price action continues downwards.
AXS-USD is a prime candidate for a long squeeze due to the combination of the high negative funding rate and the relatively low price. This suggests a significant number of leveraged long positions are vulnerable to margin calls. A sharp price decline could trigger a cascade of liquidations, amplifying the downward pressure and resulting in substantial losses for those holding leveraged long positions.
Key price levels to watch include immediate support around $2.40 and then $2.30. A break below these levels could accelerate the squeeze. On the upside, resistance sits around $2.60 and $2.70. Failure to break these levels will increase the likelihood of further downside.
Compared to other candidates like RIVER, which has a -5.270% daily FR, AXS-USD's higher negative funding rate suggests a more immediate and potentially severe squeeze. While RIVER's price is significantly higher at $78.78, the percentage difference in funding rates makes AXS-USD a more compelling candidate at its current price point.
Without historical context available, the present analysis is based solely on current data. It's crucial to research past price action and funding rate patterns to gain a more complete understanding of AXS-USD's behavior.
Risk Assessment
The primary risk is that the negative funding rate could reverse if bullish sentiment suddenly returns to AXS-USD. This could be triggered by positive news, a broader market rally, or short covering. A significant price surge could invalidate the long squeeze thesis and potentially trigger a short squeeze instead. Traders should closely monitor market sentiment and price action for any signs of a reversal.
Another risk factor is the potential for whales or market manipulators to artificially pump the price, squeezing out short positions and disrupting the expected long squeeze. Liquidity can also be thin at times for AXS-USD, which can amplify price volatility in either direction. Finally, unexpected exchange outages or API issues can disrupt trading and impact the execution of any planned strategies. Traders need to actively manage risk and use appropriate stop-loss orders.
Trading Strategy
A delta-neutral approach could involve opening a small short position on AXS-USD to profit from the expected price decline. Entry should be considered after a confirmation of further downside below $2.48. A stop-loss order should be placed above the $2.60 resistance level to limit potential losses if the market reverses. Alternatively, a trader could purchase out-of-the-money put options to capitalize on the potential downside while limiting upfront risk. Profit should be taken if the price reaches the $2.30 support level or if the funding rate turns positive. Monitor the funding rate and volume to adjust the position size accordingly.
Exchange Data
| Exchange | Price | Funding Rate | Open Interest |
|---|---|---|---|
| Paradex | $2.49 | -0.2878% | - |
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.