CAP crypto plunges 19% – Will $682K in outflows fuel a rebound?

Cap [CAP] has had a sluggish start to the day, with the asset declining roughly 19% in the past day at press time, as bearish selling pressure continues to weigh on its price.

However, activity in the perpetual and Spot markets, alongside traders’ positioning for a potential bull run, could drive a rebound in CAP’s price in the near term.

Long positions dominate despite price decline

Positioning in the perpetual market has been one of the hints suggesting that CAP could see a short- to near-term rally, based on the Funding Rate data.

Funding Rate tracks whether long or short positions dominate an asset’s perpetual market. When positive, it implies there are more long contract positions in the market than short positions, while a negative rate implies that short positions are dominating.

At press time, data shows that CAP has a Funding Rate of 0.0182% on the chart, which implies that there have been more long positions in the market than short contracts.

CAP’s price declined as short positions increased and the Funding Rate fell from an October 26 high of 0.0837%, although long positions still dominated the market.

Additionally, the perpetual market recorded an inflow of fresh capital, reaching $219 million, according to CoinGlass, while the netflow remained positive at $1.15 million.

Spot outflows support rebound hopes

Strength in the Spot market has been building, adding to the overall possibility of an upswing in the near term.

According to data from CoinGlass, Spot Netflow confirmed that there had been more outflows than inflows, adding to the possibility that the price could rally. Spot Netflow over the past 24 hours stood at -$682,000 as of writing, as more outflows occurred during that period.

More outflows imply that investors have a longer-term outlook on the asset and are currently accumulating it as they anticipate its future value will be higher than its present value.

The liquidation of short and long positions over the past day further supports the possibility of a rebound. Traders liquidated $1.03 million worth of CAP positions, including $429,710 in long positions and $602,930 in short positions.

This implies that, despite the price trading downward, short positions accounted for more losses than long positions. If this trend continues, it could suggest that short positions carry more risk, potentially forcing traders to take long positions on CAP.

CAP sentiment remains neutral

Sentiment around CAP is neutral, with investors showing an equal balance between buying and selling activity.

Neutral sentiment during a period when the price is declining significantly can sometimes indicate that downward pressure on the asset may subside in the near term.

Overall, given the Spot market activity, investor accumulation, and the dominance of long positions in the perpetual market, the chances of a rebound remain relatively high.

• Spot Netflow fell to -$682,000, while traders liquidated $1.03 million worth of CAP positions, supporting the possibility of a near-term rebound.