Key Takeaways

SKY’s rally in the past day comes as Open Interest hits a new all-time high. Spot and technical indicators point to a potential decline ahead as liquidity weakens.

In the past day, Sky [SKY] led market gains, recording a 10% surge within the period.

Analysis shows that the drive behind SKY likely came from the derivatives market. However, opposing liquidity pressures could force the asset’s price lower.

SKY hits record high

The rally in the past day coincided with the token reaching a record high in the derivatives segment.

In the past 24 hours, the governance token saw Open Interest rise to $2.33 million, a 27% growth from the previous day. This heightened flow of liquidity was accompanied by a surge in derivatives trading volume.

At press time, CoinGlass data showed the long-to-short ratio rising significantly, with a reading of 1.14.

Typically, a reading above 1 for the Taker Buy-Sell Ratio implies that buying volume outweighed selling volume in the market during this period.

AMBCrypto, however, found that while the derivatives market appears to be tightening, liquidity in other fronts is being withdrawn.

Liquidity steps back from the market

Market analysis shows a shift in liquidity away from SKY over the past day. For instance, spot market data revealed five consecutive days of outflows, totaling $1.67 million in sales.

That’s not all. In fact, technical indicators are flashing warning signs of a potential drop in the coming day

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Author: Olayiwola Dolapo