NIGHT Price Analysis: Is the pullback just a short-term correction? After a 12% decline in OI, spot funds are still continuously accumulating.

Based on the recent noticeable correction of the zero-knowledge proof privacy blockchain project Midnight (NIGHT), market discussions about whether the trend has reversed have emerged. From the latest data, this correction appears more like a technical breather after a cooling-off in derivatives, rather than a clear signal of a broader market downturn.

In the past 24 hours, NIGHT’s trading volume has dropped sharply by about 50%, down to $3.97 billion, reflecting short-term capital withdrawal. However, it is worth noting that this is more indicative of capital rotation rather than a collective exit by investors. On-chain data shows that the number of investors briefly fell to 6,110 on December 20 but quickly rebounded to 6,500, indicating market participation remains resilient. During the same period, NIGHT’s market cap increased by approximately $430 million, despite a short-term pullback from the high point to $1.52 billion, with no signs of structural collapse.

The derivatives market is the main source of current short-term pressure. Data shows that open interest (OI) in NIGHT has decreased by 12%, with about $127 million flowing out, bringing OI down to around $106 million. Meanwhile, the weighted financing rate for open contracts has turned negative, indicating that short positions currently hold an advantage. This combination typically corresponds to a price correction but does not necessarily signal a medium-term trend reversal.

Contrasting with derivatives, spot market sentiment remains bullish. On December 23, the spot market absorbed approximately $3.24 million worth of NIGHT in a single day, and the total spot trading volume over the past five days reached $301 million. Continuous spot buying suggests that some investors view the correction as a buying opportunity, gradually tightening circulating chips.

Technical indicators also support this view. The accumulation/distribution (A/D) indicator has only slightly declined and remains at a high level of 357 million, confirming that spot accumulation has not been interrupted. Looking back over the past week, under a similar accumulation structure, NIGHT’s price has risen by a total of 67%, demonstrating that this pattern has strong upward momentum.

From the liquidation heatmap, there is a clear liquidity cluster above NIGHT, while support below is relatively clean. Historical experience suggests that such structures are more likely to push prices upward to test higher levels.

Overall, the current correction of NIGHT is more likely a short-term consolidation after cooling off OI rather than a trend reversal signal. As long as spot funds continue to flow in and market sentiment does not deteriorate significantly, NIGHT still has the foundation to regain strength and initiate a new upward rally.