Midnight: Perp traders are walking away – And NIGHT pays the price

Midnight [NIGHT] has slipped firmly into bearish territory as capital outflows have intensified over the past few weeks.

Data shows the asset has dropped 41% over the past three weeks, with another 10% decline recorded in the last 24 hours.

Selling pressure continues to mount for NIGHT, driven largely by perpetual market participants who have weighed heavily on price action.

The dominance of these investors has amplified downside momentum, leaving the asset under sustained pressure.

Pressure builds in the perpetual market

The latest decline was further exaggerated by a sharp wave of capital outflows recorded in the past day. NIGHT has lost more than 10% of its circulating liquidity in the market, marking a significant drawdown.

In numerical terms, capital fell by $5.4 million, pushing the total balance of perpetual contracts down to just $47.95 million.

This steep gap suggests that traders are actively closing their positions, rather than new capital rotating into the market.

Capital has not only exited the market, but the remaining liquidity is now heavily tilted in favor of short positions.

Data shows that sell-side contracts currently outnumber buy-side contracts, a trend reflected in the Open Interest-Weighted Funding Rate, which has turned negative.

At press time, the Funding Rate was -0.0156%, a notably high negative reading that highlighted the depth of seller dominance.

A sustained drawdown at these levels would increase the likelihood of NIGHT slipping further below its current price range.

Who’s driving the sell-off?

Binance and OKX traders appear to be major contributors to the ongoing decline, with market data pointing to strong sell-side activity from both exchanges.

The Taker Buy/Sell Ratio, which tracks whether volume in the perpetual market favors longs or shorts, offers clearer insight. A reading above 0 signals buying pressure, while a reading below 0 indicates rising sell volume.

On both Binance and OKX, the Taker Buy/Sell Ratio has dropped below 0, with readings of 0.533 on Binance and 0.77 on OKX. Selling volume has continued to climb on both platforms, reinforcing the bearish outlook.

This is particularly important because Binance controls the largest share of NIGHT’s Open Interest in the perpetual market, while OKX holds the third-largest.

When traders on these major centralized exchanges turn bearish, it increases the probability of broader market influence, potentially dragging price even lower.

Is a deeper decline inevitable?

The probability of further downside remains elevated, given the prevailing bearish conditions across the market.

Data from the liquidation heatmap suggests that price could drift into lower liquidity clusters, with NIGHT potentially sliding toward the $0.060 level.

These lower clusters act as magnets during periods of heavy selling, increasing the risk of extended drawdowns.

However, there is a potential upside scenario. A drop into lower liquidity zones could be followed by a rebound if market conditions shift back in favor of the bulls.

Notably, significant liquidity clusters remain stacked above current price levels, extending toward the $0.073 region.

Liquidity clusters often act as price magnets, and with a bullish directional shift, the probability of a rebound would strengthen.

For now, though, short-term momentum continues to favor the bears, with NIGHT showing a higher tendency to drift lower as sell-side liquidity dominates.

Final Thoughts

• Capital outflows have intensified across the NIGHT perpetual market, with Binance and OKX traders playing a central role.
• Liquidity activity has continued to favor short positions, leaving NIGHT vulnerable to further downside.