PYTH: An Overview of the Recent Decline in Derivatives Market
The PYTH token, the base token of the PYTH Network oracle service provider, has seen a significant decline in its derivatives market. Recently, total open interest hit an all-time low, signaling a challenging period for the token.
Record Low in Open Interest and Token Price
On Monday, the token price closed at an all-time low of $0.22 amidst a broader market downturn. Data from Santiment revealed that PYTH’s outstanding interest had reached a record high of $113 million earlier in the year but has since fluctuated, witnessing lower lows and lower highs.
However, a significant market-wide drop in cryptocurrency prices led to many PYTH derivatives traders liquidating their positions, causing open interest to plummet to a record low of $19 million.
Impact of Market Sentiment and Trading Activity
Following the market decline, there has been a surge in short positions for PYTH, indicating a negative market sentiment. Traders have been actively betting on a further price decrease, leading to a bearish outlook for the token.
Moreover, over the past week, double-digit price declines have resulted in a notable amount of PYTH liquidations, totaling over $1.8 million according to Coinglass statistics. This increased selling pressure has added to the overall market weakness.
Price Forecast and Potential Scenarios
As the market sentiment remains bearish and capital outflows continue, there is a possibility that PYTH’s price could revisit its all-time low of $0.22. Conversely, if bullish sentiment gains strength, the token price may see a rise towards its 30-day high of $0.44.
It is essential for traders and investors to closely monitor market developments and sentiment indicators to make informed decisions regarding PYTH’s future performance.
