Will Peanut the Squirrel (PNUT) rise after a sharp decline?

Solana-based memecoin Peanut the Squirrel ($PNUT ) has attracted attention in the crypto world by drawing inspiration from a squirrel. With a market cap of $683 million and a 24-hour trading volume of $1.1 billion, #PNUT has quickly become the focus of investors. Despite this early success, however, the memecoin has lost more than 50 percent in value in the last two weeks, making investors nervous. So what's the latest on the popular memecoin?

PNUT experienced a strong rally during and after the 2024 US elections. However, interest in PNUT has waned since then as BTC and $ETH began to decline. The current correction in Bitcoin's price has affected all altcoins, with Bitcoin's market dominance rising above 58 percent. This overall decline has hit memecoins especially hard.

There are currently more than 78,000 PNUT wallet holders. In addition, the token has more than $12 million in locked liquidity. Many crypto investors, especially memecoin enthusiasts, are still hopeful about PNUT.

However, the project is facing serious legal problems. Mark Longo, known as the “squirrel dad,” has issued a warning to Binance and Coinbase for using his pet’s image without permission. Longo was accused of fraud with “rug pull” claims in previous memecoin projects and then launched a new project called Justice for Peanut (JFP).

PNUT’s price has lost more than 71 percent since its peak of $2.40 last month. It is currently testing the 0.618 Fibonacci level, an important support level on the daily chart. A potential double bottom formation is forming on the short-term four-hour chart.

The double bottom formation indicates that the price may rise. With the market recovering, the $1 band may be targeted for PNUT. However, factors such as the continuation of legal problems, the weakening of the memecoin trend or the negative trend of the market will push the price to even lower levels.