Market Analysis

Mantle's Descent into Bearish Territory

Mantle, an altcoin, has slid 11% to a low of $0.54 due to intense selling pressure. The altcoin's weakness arose from the derivatives market, with Open Interest falling 14% to $50 million and Derivatives Volume rising 210% to $39 million.

Reduced Leveraged Exposure and Position Unwinding

The falling Open Interest alongside rising volume suggested that the market experienced position unwinding. A look at Futures flow and Perpetuals Volume confirms this sentiment. According to Coinalyze data, Mantle's Perpetuals Sell Volume on Bybit rose to $4.2 million, compared to $3.2 million in Buy Volume.

Spot Sentiment Remains Unchanged

Despite the panic in the derivatives market, Spot sentiment remained unchanged. A look at Spot netflow shows that this metric has remained negative for two weeks, suggesting exchange outflows have consistently outpaced inflows.

Potential Revisit of $0.50 Support

Mantle's downside momentum has strengthened extensively. Looking at the Relative Strength Index (RSI), the metric fell to 41, dipping into deep bearish territory. RSI declined for six consecutive days following a bearish crossover. At these levels, RSI implied that bears are stronger and have significantly displaced bulls.

Potential Further Weakness

Such a structural setup has often preceded further weakness and more losses on the charts. Thus, if sellers continue to exert pressure, Mantle could fall to $0.54 again and likely revisit the $0.50 support level.

Potential Reversal

With bulls still active in the Spot market, they could, however, help invalidate this bearish outlook. If demand in the spot market holds, we could see MNT reclaim $0.6 and push for a daily close above $0.63.