**Key Takeaways**
– Why did Plasma defy typical bearish trends?
Open Interest surged to $255 million despite a 15% price drop, indicating renewed trader participation.
– What could drive XPL rebound soon?
A steady Long/Short Ratio above 2.0 and ongoing short liquidations may strengthen bullish momentum.
—
**Plasma [XPL] Price Drops Nearly 15% Amid Surging Open Interest**
Plasma [XPL] experienced a sharp decline of nearly 15% in the past 24 hours, extending its downtrend throughout October. However, on-chain data reveals unusual behavior among derivatives traders that could signal an early-stage rebound—if bullish momentum can be maintained.
—
**Open Interest Surges Despite Bearish Price Action**
Contrary to typical market behavior, Plasma’s Open Interest (OI) rose to $255.08 million, up from lows near $233 million. Usually, OI decreases during a price drop as traders close out positions. This increase suggests new positions are being opened, possibly by institutional investors buying the dip.
The influx of fresh capital into the derivatives market may indicate a return of speculative confidence despite weak spot price performance.
—
**Short Liquidations Send Mixed Signals**
Meanwhile, Plasma’s aggregated short liquidations reached $1.33 million, compared to just $49,000 in long liquidations. This significant imbalance points to intensifying short pressure getting squeezed amid rising volatility.
Such a setup can lead to two possible outcomes: a deeper price correction if momentum wanes, or a rapid rebound if short sellers continue to retreat.
—
**Buyers’ Dominance and Rising Institutional Interest**
At the time of writing, Plasma’s average Long/Short Ratio stood at 2.027, indicating that long positions outnumber shorts by roughly two to one. This dominance often reflects increasing trader conviction that a price recovery is imminent.
However, sustaining this optimism depends on continued demand across both spot and futures markets. While the combination of short liquidations and higher long exposure gives bulls a near-term advantage, ongoing accumulation is necessary to confirm a trend reversal.
—
**What’s Next for XPL?**
In summary, the current market setup presents a mixed yet potentially optimistic outlook for Plasma’s price action. Despite the recent sharp decline pushing XPL toward a critical support level, rising open interest and strong buyer dominance suggest renewed market confidence.
If bullish momentum persists, XPL could be on the cusp of a meaningful rebound. Traders and investors should monitor key metrics like Open Interest, Long/Short Ratios, and liquidation trends to gauge the likelihood of a sustained recovery.
https://ambcrypto.com/plasma-drops-15-but-one-metric-fuels-hopes-of-xpl-rebound
