Nov 21, 2024

6thTrade

POPCAT, a popular memecoin, recently hit an all-time high (ATH) of $2.07. However, it has since experienced a sharp decline, falling 22.71% to $1.72 at the time of writing. The question now is whether this drop is a temporary correction or the start of a sustained downtrend.

Recent Performance: Decline After ATH

  • Weekly Performance: Despite the recent pullback, POPCAT still recorded a 19.55% gain on the weekly charts.

  • Monthly Performance: The memecoin is up 24.64% for the month, highlighting its earlier bullish trajectory.

This sharp reversal follows the broader crypto market’s upswing earlier in the month, during which many memecoins, including POPCAT, surged to new highs.

Market Indicators: A Shift from Bullish to Bearish

Relative Strength Index (RSI):

  • The RSI dropped from 66 to 53 over the past week, indicating weakening buying pressure.

  • The RSI-based moving average also displayed a bearish crossover, reinforcing the current dominance of sellers.

Directional Movement Index (DMI):

  • The +DI dropped to 17, while the ADX held at 24, signaling a loss of upward momentum.

  • A bearish crossover in the DMI suggests strengthening bearish pressure.

Exchange Netflows:

Data from Coinglass revealed consistent positive spot netflows over the past four days, indicating increased asset transfers to exchanges, likely for selling.

Long/Short Ratio and Liquidations:

  • Short positions now dominate, with the long/short ratio showing a majority of investors betting on further price declines.

  • Liquidations of long positions have risen, suggesting that confidence in the bullish trend is waning.

What’s Next for POPCAT?

Short-Term Outlook:

If the bearish sentiment persists, POPCAT’s price could fall further to test critical support around $1.37. Increased selling pressure and profit-taking are likely to exacerbate this trend.

Potential Recovery:

  • A bullish turnaround could transform the current decline into a mere pullback.

  • If bulls regain control, POPCAT’s price may rebound toward $1.97, with minimal resistance beyond this level.

  • This could set the stage for another ATH on the charts.

Conclusion

POPCAT’s recent pullback reflects a shift in market sentiment from bullish to bearish, driven by rising selling pressure and declining investor confidence. While the short-term outlook points to potential downside, a reversal of sentiment could push the memecoin back on its upward trajectory, with the possibility of hitting new highs.

For now, market participants should watch key support and resistance levels closely, as well as broader market trends, to gauge whether POPCAT’s rally has further legs or if the current downtrend will continue.