ASTER recently suffered a sharp decline, falling from a high of $0.77 down to $0.61 before staging a slight recovery. The altcoin originally rallied on August 21, driven by market optimism surrounding decentralized perpetuals exchanges after announcements regarding the CFTC and Hyperliquid entering U.S. markets. However, changing market conditions, including a renewed trade war between the U.S. and Canada, caused the broader cryptocurrency market to retrace.
During the market downturn, ASTER breached the $0.7 support level, resulting in a 15% drop. At the time of reporting, the token traded around $0.63, marking an 8.3% decrease on daily charts alongside a 50% drop in trading volume.
Derivatives Market and Liquidation Impact
The sudden drop forced traders expecting continued rallies out of the market. Over the span of a day, more than $4.6 million worth of long positions were liquidated.
This long squeeze led other market participants to rapidly close positions to avoid liquidation. CoinGlass data indicated that ASTER's Open Interest dropped by 18.8% to $309.1 million, while derivatives volume decreased by 47% to $434 million. The concurrent drop in open interest and volume pointed to traders actively reducing their exposure.
Data from Coinalyze further reflected this selling pressure. Perpetuals sell volume rose to 28 million while buy volume fell to 17.8 million, resulting in a delta volume of -10.2 million and net buying at -28 million. Additionally, futures outflows climbed to $80.4 million against $66.6 million in inflows, bringing netflow to -13.76 million.
Technical Indicators and Levels to Watch
The intense selling pressure caused ASTER's Relative Strength Index (RSI) to fall from 87 to 54. While this signals a weakening market structure, holding above the 50 mark indicates that buyers remain active and sellers have not completely taken over.
If selling pressure persists and pushes the RSI below 50, a bearish trend would be confirmed, potentially sending the token below $0.6 with $0.59 serving as a key support level. Conversely, a daily close above $0.65 would invalidate the current bearish outlook.
