Pyth (PYTH) Records New Lows on Multiple Fronts as Derivatives Market Open Interest Drops to All-Time Low

PYTH, the token that powers oracle service provider Pyth Network, has witnessed a significant decline in its derivatives market. Its total open interest has fallen to an all-time low.

The token that powers oracle service provider Pyth Network, known as PYTH, has seen a steep decline in its derivatives market, with total open interest dropping to an all-time low.

This comes as the token’s price closed at a record low of $0.22 during Monday’s trading session amid a broader market sell-off.

PYTH Open Interest Hits Record Low

PYTH’s open interest reached an all-time high of $113 million on March 17, as shown by Santiment's data. Since then, it has experienced several fluctuations, making both lower highs and lower lows.

However, Monday’s deep losses in the crypto market prompted many PYTH derivatives traders to close their positions, leading to a drastic decline in open interest, which hit a record low of $19 million.

Open interest indicates the total outstanding derivative contracts, like options or futures, that haven’t been settled yet. When it drops, it shows traders closing their positions and exiting the market without opening any new positions.

Moreover, several long positions were liquidated as PYTH’s price declined by double digits over the past week. According to Coinglass, over the past seven days, PYTH’s long liquidations amounted to over $1.8 million.

As traders demanded more short positions since early August, the market sentiment turned bearish, as expected. This means more traders are buying PYTH and anticipating a price decrease, compared to those accumulating the altcoin to sell at a higher price.

PYTH Price Prediction: Will Price Revisit All-Time Low?

The altcoin also faces a bearish bias in its spot market. Highlighting the lack of demand, PYTH’s Relative Strength Index (RSI), when assessed on a daily chart, is below the 50-neutral line at 40.35, as of writing.

An asset’s RSI gauges its overbought and oversold market conditions. At 40.35, PYTH’s RSI suggests that selling pressure exceeds buying activity in its market.

Additionally, the altcoin’s Chaikin Money Flow (CMF) is below the zero line at -0.01, indicating that capital outflow exceeds inflow in its market. A negative CMF value is a sign of market weakness, as it often precedes a sustained price decline.

PYTH’s price risks revisiting its all-time low of $0.22 if demand remains low and capital outflow persists. However, if bullish sentiment builds up, the token’s price may rally toward a 30-day high of $0.44.