Soon [SOON] started the day on a bearish note, with the asset declining 14%, according to CoinGlass. However, market activity shows that the current price level has not changed the fundamental factors hinting at a possible bullish base still being in place.
The classic explanation for this is that while SOON’s short-term outlook remains bearish, its long-term prospects still show strong upside potential.
SOON faces heavy capital outflows
The broader market shock has played a key role in pulling capital out of the asset. Press-time data shows that SOON has recorded significant outflows in both the perpetual and spot markets.
In the perpetual market, the netflow data shows heavy selling activity. CoinGlass shows that capital outflows reached roughly $10.44 million, compared to inflows of $8.62 million, putting its net inflow at -$1.82 million.
A negative net inflow in the perpetual market often suggests that traders are pulling capital out of the market, reflecting heightened volatility.
In the spot market, the outlook is similar, with spot net inflows turning positive. In this case, a positive net inflow suggests that more SOON is being moved into exchanges than out of them, potentially indicating that traders are preparing to sell rather than accumulate.
Press-time data shows a spot net inflow of $697,000, as more capital moved into exchanges while traders prepared to sell off the asset, possibly in reaction to bearish market conditions.
Liquidation data points to a rebound
The current capital movements across the perpetual and spot markets appear to reflect short-term market activity rather than a long-term shift.
The liquidation heatmap, on the other hand, points to a potentially bullish outlook for SOON over the near to long term. CoinGlass’s 1-month liquidation heatmap shows that liquidation clusters are heavily concentrated above the current price, with barely any visible clusters below it.
Price tends to move towards liquidation clusters on the chart, and right now, their heavy concentration above the current level could pull the asset towards those levels.
Importantly, the limited clusters below the price indicate that sellers could run into exhaustion. If demand grows, SOON could see a rebound, potentially creating new local highs.
For now, momentum is against long traders in the market, with $67,770 in losses recorded by long traders compared to just $4,440 in losses for short traders over the past 24 hours.
Traders maintain bullish positions
Traders in the perpetual market remain bullish across SOON contracts, based on funding rate data.
The funding rate measures whether long or short positions dominate an asset’s perpetual contracts. Presently, long positions dominate the market, as the funding rate remains positive at approximately 0.0051%, according to CoinGlass.
Bullish positioning at a time when prices are weak and the market is declining suggests that a potential rebound could still play out in the near term. Overall, capital in the perpetual market, as reflected in the funding rate data, still sits at $32.32 million at the time of writing.