The memecoin sector became the biggest beneficiary of new capital entering the crypto market over the past day, posting an average gain of 9.11%.
The SPX6900 (SPX), in turn, rose about 16% following this influx of capital, but market data suggests greater complexity beneath the surface.
AMBCrypto’s findings show that sellers are still trying to position the market in a way that could tip the scales in their favor.
Capital inflows remain high
Liquidity circulating in the SPX market has increased in both the spot and perpetual markets.
The perpetual market saw the highest capital inflow. Open Interest (OI), which reflects the level of liquidity flowing into perpetual contracts, increased by 15% to $42 million as of January 4.
Spot market activity also remained bullish, with more SPX tokens exiting exchanges than entering.
Source: CoinGlass
Higher outflows than inflows suggest investors are moving memecoin to private wallets for long-term holding. This behavior reduces the supply available for trading on exchanges.
Reports show that so far this week, as of December 29, the total inflows and outflows stood at $5.56 million at press time. On a cumulative basis, capital movements reached $11.86 million.
Liquidity works against sellers
Liquidation data showed strong resistance to traders betting on downward moves.
Data from CoinGlass indicated that over the past day, short traders made significantly more losses than long traders. For every dollar lost by long traders, short traders lost $17.
In absolute terms, long traders lost $5,800, while short traders recorded losses of $100,800. This imbalance highlights the short-term dominance established by long traders in the market.
Source: CoinGlass
The liquidation heat map suggests continued possibility of upward price movement, although any further gains could remain limited.
However, the overall picture remains mixed. The same heat map reveals large pools of liquidity positioned below current price levels, keeping the risk of a decline firmly in play.
Shorts refuse to retreat
Despite mounting losses among short traders, they have not left the market. Instead, many appear to be positioned in anticipation of a possible price move that could favor their bets.
The open interest-weighted funding rate, which determines whether market liquidity favors short or long contracts, highlighted the dominance of sellers.
Source: CoinGlass
This indicator remains negative, with a reading of -0.0037%, signaling that short positions continue to outweigh long contracts in the perpetual market.
For now, while optimism persists among long traders, caution remains in order as sell-side pressure continues to shape market dynamics.
