Awe Network [AWE] recorded a massive decline in the past day, which, according to CoinMarketCap, brought the asset’s market capitalization down 14% to $124.13 million at press time.
The decline remains a cause for concern, as Sentiment data remained highly positive, with a reading of 6.00 on the chart.
Further market analysis points to the possibility that AWE’s drawdown may not have ended yet, and that the asset still has the tendency to move lower from its present level.
Binance traders drive selling pressure
The Long/Short Ratio warned that short volume dominated at the time of writing.
A ratio above 1 implies that there is more long volume, while a reading below 1 suggests that there are more short sellers in the market. The overall ratio across cryptocurrency exchanges shows that over 52% of AWE’s trading volume comes from sellers.
One of the major contributors to this underperformance has been traders on Binance. The exchange controls by far the majority of AWE’s trading volume at $7.5 million, compared with Bybit, which comes second with just $1.61 million.
Presently, the ratio shows that Binance has more sellers, with a reading of 0.59 over the past 24 hours. This is a major bearish indicator that suggests AWE could still suffer further declines in the near term.
The reason for the major Binance sell-off is reasonably linked to the recent $6.3 billion hack, which took place in late October and has caused panic withdrawals across the market.
Perpetual market turns bearish
Capital in AWE’s perpetual market has been heavily concentrated towards selling the asset as short positions increase.
This is based on the Funding Rate data, which flipped negative. At the time of writing, the Funding Rate had a reading of -0.0020% on the chart. A negative reading confirms that more sellers’ positions are active than long positions.
The Funding Rate, as of November 1, maintained a moderately positive reading of around 0.0018% on the chart, implying that investors previously expected a rally.
This implies that the $6.38 million in AWE’s perpetual market gives sellers room to continue driving the current sell-off. It is also worth noting that the present sell-off coincides with the period when Binance resumed withdrawals across the market.
AWE’s Perpetual Netflow over the past 24 hours stood at -$517,340 at press time, suggesting that investors are pulling more capital out of the market than they are putting in. Capital outflows, alongside heavy bearish concentration, put the asset at risk of witnessing further declines.
Whales add to selling pressure
The majority of the sell-off witnessed in the past day came from whale activity.
As seen on the chart, the Whale Retail Delta has remained on the positive side of the chart, implying that there has been more whale selling than retail selling overall.
The concern with whale activity is that these traders tend to hold their positions for much longer, adding to the overall risk that AWE could decline further from its present level on the chart.
Final Summary
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AWE dropped as Binance traders increased selling pressure, with the Long/Short Ratio falling to 0.59.
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Negative Funding Rates and whale selling suggest AWE could face further declines as capital outflows intensify.
