Midnight [NIGHT], the zero-knowledge-based privacy blockchain, is currently experiencing a fascinating split in market sentiment. While short-term indicators suggest bearish pressure and capital withdrawal, a closer look reveals a resilient long-term investor base actively accumulating the asset, hinting at a potential upward trajectory despite immediate headwinds.
Derivatives Signal Short-Term Pressure
The market for NIGHT has recently seen significant short-term selling pressure, particularly in the derivatives sector. Trading volume plummeted by 50% in 24 hours to $3.97 billion, and Open Interest (OI) declined by 12%, indicating a $12.7 million capital exit from the market. Further solidifying this bearish outlook, the Open Interest–Weighted Funding Rate turned negative, a clear sign that short positions are outnumbering long contracts, suggesting a prevailing short-term bias among traders positioning for a price decline.
Spot Market Demonstrates Strong Accumulation
In stark contrast to the derivatives market, spot market participants are displaying robust long-term conviction in NIGHT. Data shows a continuous inflow of capital, with investors spending $3.24 million on purchases in the early hours of December 23rd, and total spot buys reaching $301 million over five days. This aggressive accumulation points to a strong belief in NIGHT's future and indicates a tightening supply of tokens. The Accumulation/Distribution (A/D) indicator also reinforces this, showing only a minor retracement and remaining firmly positive, consistent with ongoing spot buying activity that has historically driven significant price rallies, such as a previous 67% increase.
Bullish Outlook from Liquidation Heatmap
Despite the short-term bearish signals from derivatives, the liquidation heatmap provides a largely bullish outlook for NIGHT. The heatmap reveals significant liquidity clusters positioned above the current price, which historically act as magnets, often attracting upward price movement. Critically, there are no substantial liquidity clusters below the current price, suggesting limited downside risk. This technical analysis aligns with the strong accumulation observed in the spot market, indicating that the recent pullback is likely a temporary retracement rather than a trend reversal, setting the stage for a broader upward move should sentiment remain positive.
