Key takeaways
Why did Plasma defy typical bearish trends?
Open interest rose to $255 million despite a 15% price drop, showing renewed participation from traders.
What could fuel XPL’s soon rebound?
A stable long/short ratio above 2.0 and ongoing short liquidations may strengthen the bullish momentum.
Plasma [XPL] fell almost 15% in the last 24 hours, extending its October decline.
However, on-chain data revealed unusual behavior among derivatives traders that could hint at an early-stage bounce if the bulls maintain their momentum.
Open interest rises despite explosive bearish decline
Despite the sharp decline, Plasma’s open interest (OI) rose to $255.08 million, up from lows of around $233 million. Typically, OI contracts when prices fall as traders exit their positions.
This time the rise indicated that new positions were being opened, possibly by institutional traders who bought on the dip.
Source: Coinalyze
On top of that, the influx of new capital into the derivatives market could signal a return of speculative confidence despite bearish spot action.
Short sell-off sends mixed signals
Meanwhile, Plasma’s aggregate short liquidations rose to $1.33 million at press time, versus just $49,000 in long positions. The imbalance reflected increasing short-term pressure that eased as volatility increased.
That setup could swing in either direction: a deeper correction if momentum fades, or a quick bounce if short sellers pull back.
Source: Coinalyze
Plasma Buyer Dominance Complements Growing Institutional Interest
At the time of writing, Plasma’s long/short ratio (AVG) stood at 2.027, meaning that longs outnumbered shorts by approximately two to one. Such dominance often indicates growing conviction by traders in a price recovery.
Still, whether optimism remains will depend on sustained demand in both spot and futures markets.
The combination of short-term liquidations and increased long-term exposure gives the bulls a short-term advantage, but only continued accumulation can confirm a trend reversal.
Source: Coinalyze
What could be next for XPL?
In summary, the current setup presents a mixed but potentially bullish outlook for XPL price action.
Although the recent sharp drop almost led the token to collapse, the growing open interest and strong dominance of buyers suggest growing confidence in the market.
If the bullish momentum continues to increase, XPL could be approaching a significant reversal.
