PIPPIN drops 37% as $43 million is withdrawn from the market – What's going on?

Over the past 24 hours, the price of PIPPIN has dropped sharply by up to 37%, coinciding with a $43 million decrease in open interest (OI), indicating a wave of significant position closures happening in the market.

This substantial decline often reflects traders exiting leveraged positions as prices fall. It suggests that derivatives traders have quickly liquidated their long bets amid a weakening market.

Source: CoinGlass## Falling open interest signals capital outflow

Typically, a sharp decline in OI is a clear sign that positions are being aggressively closed. When OI decreases alongside the price, it usually indicates widespread liquidation of long positions, leading to a decline in confidence in the bullish trend within the derivatives market.

As a result, selling pressure has increased significantly in PIPPIN’s market structure. However, the large scale of this liquidation suggests that most of the losses have been borne by highly leveraged investors.

Trading volume surges raise concerns

Conversely, while the price and OI have dropped sharply, PIPPIN’s trading volume has spiked, increasing by approximately $340 million according to analysis from Coinphoton.

At first glance, the surge in trading volume might be seen as a sign of strong market participation. However, Funding Rates data indicates dominance by the sell side, implying that most of this increased volume comes from active sell orders rather than accumulation from buyers.

Source: CoinGlass## Technical structure shifts to a downtrend

On the daily chart, PIPPIN’s market structure has clearly shifted to a downtrend, with lower highs and lower lows confirming the current trend. The price is rapidly approaching a key support zone near $0.185. This area could trigger short-term buying reactions, but prolonged selling pressure may weaken the price’s ability to recover.

Additionally, trading below the Exponential Moving Average (EMA) further reinforces the bearish outlook, highlighting technical weakness in the market structure.

Source: TradingView## Outlook for PIPPIN

Currently, the market remains tilted toward the sellers, with increasing distribution pressure. The 37% daily drop has been a shock, accelerating the capital outflow from the market.

In the derivatives market, the $43 million decrease in OI is a clear signal that investors are closing positions decisively. This move aligns with the downward trend in Funding Rates and ongoing selling pressure.

If the downtrend continues, the critical support zone at $0.185 will be the next challenge for PIPPIN. However, if buying interest is insufficient to trigger a significant rebound, the token could face further declines.

In summary, PIPPIN is currently under strong selling pressure and remains in a prolonged distribution phase.

Mr. Giao