- POPCAT’s value depreciated by 5.37% in the last 24 hours
- Market indicators pointed to a shift in market sentiment from bullish to bearish
Earlier in the month, the wider crypto market registered a major upswing. Owing to the same, most of the market’s memecoins surged to hit recent new highs and ATHs. POPCAT was no different, with the altcoin hiking to hit a new ATH of $2.07 on the charts.
Since then, however, the memecoin has seen a strong trend reversal – A sign of a potential downtrend.
At the time of writing, POPCAT was trading at $1.72 following a 5.37% decline over the last 24 hours. What this suggested was that after hitting $2.07 three days ago, the memecoin declined by 22.71%. Prior to the same, the crypto had been on an upward trajectory. It had by 19.55% on the weekly charts and by 24.64% on the monthly charts.
Hence, the question – Is the decline a mere correction or is the market set for a further downtrend?
What does POPCAT’s chart say?
According to AMBCrypto’s analysis, POPCAT, at press time, was noting a shift in market sentiment from bullish to bearish thanks to rising selling pressure.
Source: Tradingview
Such a shift can be evidenced by the fact that POPCAT’s Relative Strength Index (RSI) declined from 66 to 53 over the last 7 days. Also, the RSI-based MA flashed a bearish crossover to sit above its RSI at 56.
This suggested that the memecoin is currently facing strong selling pressure and sellers have been dominating the market. A hike in selling pressure often leads to a price decline on the charts.
The risk of a price decline can be further evidenced by a declining +DI, with the same dropping to 17 after a bearish crossover left the ADX at 24. This implied that the altcoin’s uptrend lost some momentum while bearish pressure across the market strengthened.
Source: Coinglass
Additionally, this selling pressure can be seen in the form of greater inflows into exchanges.
In fact, according to Coinglass data, spot netflows have remained positive over the last 4 days. This suggested that investors have been transferring their assets into exchanges to sell, especially to maximize profits.
Source: Coinglass
A shift in market sentiment can also be seen among short position holders, with this cohort seemingly dominating the market right now.
The long/short ratio also revealed that most investors are now betting on the price to decline.
Source: Coinglass
Finally, this market dynamic can be seen with liquidations for long positions too, with the same surging over the past week.
Longs have been forcefully liquidated from their positions – A trend that has persisted for a while now. When long position holders lack confidence in the trend, they avoid paying premiums to hold their positions. By doing so, they close their positions or are forced out.
What next for the memecoin?
In conclusion, the altcoin’s market pointed to a decline in the short term. Therefore, if this sentiment holds, POPCAT’s price will find its next critical support around $1.37.
However, if bulls can regain the market, this decline will be a mere pullback and push the price back towards $1.97. Resistance will be insignificant above this level and thus, the memecoin might hit another ATH on the charts.
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