CYBER token open interest hits $200 million as Korean traders pump CyberConnect price

CyberConnect price is up 740% in the last week and 230% in the last 24 hours on Upbit exchange against BTC.
The current open interest for CYBER is $200.69 million, with up to $4.6 million in short positions liquidated.
The surge is due to traders in Korea, which points to an impending fall as is characteristic of pump and dump activities.

CyberConnect (CYBER) price has recorded a remarkable rally over the past week, outperforming even the crypto top-10 like Bitcoin (BTC) and Ethereum (ETH). A closer look at the uptick indicates that it is the works of Korean traders, notoriously famous for pumping and dumping.

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Korean traders pump CYBER token

CyberConnect token price is up close to 740% in the last week and almost 230% against Bitcoin (CYBER/BTC). Interestingly, however, the value of the token is lower on Binance at around $9.7 and other exchanges in the US but higher on Upbit, recording almost $15.0 against the Dollar (USD) at press time.

#PeckShieldAlert $Cyber #Upbit #bithumb pic.twitter.com/xeBqsMtfCa
— PeckShieldAlert (@PeckShieldAlert) September 1, 2023

Upbit is a South Korean cryptocurrency exchange and the largest in the South Asian region in terms of trading volume.

The surge aligns with up to $200.69 million in open interest, showing the expansive CYBER contracts that remain open.

CyberConnect open interest

Open Interest, funding rate FAQs

How does Open Interest affect cryptocurrency prices?

Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of an increase in efficiency, and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.

How does Funding rate affect cryptocurrency prices?

Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.

However, the surge saw up to $4.6 million in short positions liquidated as the stop losses of the traders who had taken short positions on the altcoin closed automatically. Meanwhile, only $806,510 long positions were liquidated. This combines to a total of almost $5.5 million in total liquidations.

CYBER liquidations chart

As shown in the chart below, CyberConnect price is $0.00115076 against BTC, with a long candlestick on September 1. While this is attractive to the eyes, a stark drop could be imminent, considering Korean traders are likely the ones fueling the uptrend.

CYBER/BTC 1-day chart

Korean traders in action

Korean traders are infamous for pump and dump schemes, a stealth strategy where the traders select assets carefully. Citing an expert from local newspaper Korea JoongAng Daily:

“The liquidation of contracts for differences (CFD) — a leveraged derivative that dumps shares at the opening price if deposits fall below a certain percentage — may have accelerated the plunge and caused a snowballing of damage.”

For the layperson, a CFD is a derivative product where a trader can trade live market prices without owning the asset itself.

Some of them trade through matched orders, such that brokers sell the assets at a pre-determined time and price to another broker, making it look like a normal trade. In turn, this injects apparent volatility into the asset involved. With the right amount of money, it becomes an obvious win kind of scenario.

They go as far as gathering “investors” to o increase their funding. The purported investors, who are just manipulators, could be high-net-worth individuals like celebrities.

The traders often take their time to gradually pump asset prices using matched orders and evade financial regulation monitoring by executing the trades in different locations and under different IP addresses. With the asset’s trading volume and profit growing, more unsuspecting “investors” step in, entrusting their finances to the group. Eventually, even retail traders wishing to jump on the hype increase.

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