Liquidation wave slams Midnight [NIGHT] – is buyer confidence broken?

Midnight [NIGHT] is down about 16% in 24 hours, taking its two-day drawdown to more than 21%. The decline comes as the broader crypto market is on the brink of falling below a $2 trillion valuation from above $2.50 trillion as this week began.

Loss in confidence across its ecosystem, liquidations, and retail selling just added to NIGHT’s decline.

Are long traders capitulating?

According to data from CoinGlass, long traders were capitulating with their liquidations 109x larger than those of bears. In 24 hours, $74K in longs were closed while shorts only lost $678.

From a broader numerical perspective, longs worth more than $170K had been wiped out in just three days. During the same period, however, only $4K worth of sell orders had been liquidated.

Long liquidations have been the dominant trend since the beginning of May.

The data showed that bulls were capitulating following a surrender to bears who were taking the price of NIGHT further down.

NIGHT’s buy-side liquidity swept

On the charts, NIGHT lost a slanting trendline support that came about after a double bottom pattern at around $0.03. Bulls defended this trendline until the price of Midnight hit $0.042.

Sellers swept buy-side liquidity at $0.03882 and consolidated around this region. What followed was a loss of the trendline, and then NIGHT crashed more than 21%. These events rendered the breakout above $0.03882 fake.

The indicators were also supporting the selling activity. For instance, the Top Traders Long/Short Ratio Accounts fell from 2 to 1.29. This indicated large holders on Binance were offloading their NIGHT tokens.

Additionally, the Chaikin Money Flow (CMF) dropped from 0.21 to negative 0.33 in four days. This reflected a market-wide capital outflow.

Therefore, NIGHT may be set for another drop to at least the base level of $0.03, which initiated the previous rally. However, the outcome was dependent on bulls failing to defend the level at $0.03188.

Whales buy, but retailers sell

Another reason contributing to this drop was the lack of cohesion among different groups of holders.

For instance, retailers were massively selling the token. Retail wallet types like shrimp, crab, octopus, and fish sold about 550K ADA worth of NIGHT.

On the other hand, wallet types of large holders, that is, dolphins, sharks, and whales, bought 2.232 million ADA worth of NIGHT.

Meanwhile, NIGHT’s on-chain holders crossed 75K, adding 1,000 in the past week. This suggested that the current drop may be short-term, especially since the broader market is weak.

Final Summary

• Midnight declines by more than 16% in 24 hours amid a spike in long liquidations and retail selling. 
• NIGHT loses a key trendline support level as top traders on Binance sell and capital outflows surge.