Waves Labs has reported that Futures data revealed that a DAXA warning on Dec. 8 did more harm to the WAVES token than the depegging of the USDN stablecoin “ever could.”
The Open Interest (OI) on WAVES across various centralized exchanges (CEXs) dramatically increased, following an Upbit announcement to suspend WAVES token deposits on Dec. 8, according to Waves Labs.
The South Korean exchange Upbit suspended WAVES deposits on Dec. 8 after receiving a warning from Digital asset collective DAXA that the token was fundamentally unstable. The Waves team quickly disputed these allegations, but the damage had already been done as some exchanges still restricted WAVES, causing liquidity issues and uncertainty in the market. This led to opportunistic traders aggressively shorting the WAVES token, resulting in increased volatility and unstable market conditions.
On Dec. 8, WAVES derivatives saw a 176% increase in OI from a stable historical baseline of $22.6 million moments prior. Within eight hours, OI rose to $62.5 million – a level not seen since early August. This increase in OI is almost entirely due to traders shorting WAVES, as evidenced by the Funding Rate, which measures the distribution of long and short positions in futures contracts.
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