Siren [SIREN] liquidity has climbed as the asset continues to print new highs, leading the market’s top gainers over the past 24 hours following a 44% rally.
The rally comes as the cryptocurrency market as a whole is struggling to recover from the liquidity drain caused by Michael Saylor’s 32 Bitcoin outflow.
Speculative activity is fueling SIREN’s surge
Speculative activity around SIREN has reached its highest level in months, and at the time of writing, Open Interest (OI) on SIREN futures contracts has risen 46% to $91 million.
That surge represents $42 million in fresh futures capital added over the past 24 hours, a significant inflow that typically signals traders positioning for an extreme move in either direction.
While the price surge alone suggests bullish conditions. At press time, the OI-weighted funding rate read -0.0203 and continued falling, pointing to a growing base of short sellers in the perpetual market and signaling that some traders are positioning for a decline.
SIREN’s indicators flag an overvalued market
SIREN sits in overvalued territory, with both trend indicators and capital-flow indicators pointing to the same conclusion.
Bollinger Bands gauge market trends, flagging assets as overvalued above the red line and undervalued below the green line. Overvaluation often signals a retreat, while undervaluation points to recovery.
At the time of writing, SIREN was in the overvalued zone, with a high likelihood of decline as capital inflows reverse. Based on this reading, an ideal target lies near the green level at $0.62, or even the lower support at $0.16, depending on the depth of the correction.
Notably, the Money Flow Index (MFI) was also in an overvalued region of 98, indicating that traders were far more bullish on the asset than its fair value justified.
This doesn’t guarantee an immediate decline; it suggests buyers will likely hit exhaustion soon. For now, though, the sell-off has already begun and could force SIREN even lower.
Spot traders are taking profit on SIREN
The spot market doesn’t structurally support a rally, as a five-day straight sell-off suggests investors are offloading their holdings. Over that period, total netflow shows more selling than buying, with roughly $2.68 million in inflows.
This run of selling, occurring as SIREN rallies on heavy perpetual bets, suggests holders could face weakness that drags the price down. The overall signal points to a risk of further decline.
Final Summary
- SIREN topped the market’s gainers with a 44% rally, but the Funding Rate has turned negative.
- Key indicators flag SIREN as overvalued, and a steady spot sell-off suggests holders are taking profit, pointing to rising risk of a pullback.
