Popular Solana-based meme cryptocurrency Popcat [POPCAT] had a strong start to October, edging closer to a new all-time high of $1.5 within the initial two weeks. However, a sharp weekly downturn of more than 10% pulled its value back to the $1.20 range.
Interestingly, this downturn coincided with Bitcoin’s surge past the $66k mark, a move that typically attracts liquidity into major meme cryptocurrencies. Despite POPCAT having a market capitalization of $1 billion, it struggled to gain momentum.
Consequently, analysts at CryptoCrypto are now questioning whether this correction was an intentional shakeout of weaker positions, potentially setting up POPCAT for another attempt at reaching a new all-time high.
Factors Affecting POPCAT’s Future ATH Prospects
Unlike the situation earlier in October when Bitcoin experienced a moderate 2% uptick over three days, propelling it to around $62k, this increased volatility sparked considerable interest in newer meme coins that offered higher potential returns.
Among these, POPCAT caught the spotlight, registering daily gains surpassing 10% and hitting a new ATH of $1.5.
However, with Bitcoin regaining its bullish momentum and presently trading around $67k, established meme coins reclaimed their dominance, pushing newer coins to the sidelines, as illustrated by data.
A reduction in trading volume further supported this trend, declining from a peak of $800 million to $500 million, contributing to POPCAT’s recent 10% dip.
Throughout the past week, liquidity has funneled into older meme coins as Bitcoin investors distributed their gains, resulting in outflows for POPCAT.
Nevertheless, it’s crucial to recognize that this recent downturn might be a transient blip rather than a consistent pattern in each bull cycle.
Moreover, the price decline followed a surge in whale acquisitions of POPCAT. This hints that the recent drop might have been triggered as the coin reached its peak, prompting weaker positions to exit the market.
While this shakeout could pave the way for POPCAT to strive for a new all-time high by the cycle’s conclusion, the increasing dominance of its competitors poses a significant challenge.
Profit-Taking Among Traders in Other Meme Coins
Typically, a temporary low forms after each downturn, providing an entry opportunity for new investors seeking to leverage the dip by purchasing assets at a discounted rate.
Despite a neutral RSI indicating potential growth ahead, other signals do not suggest that $1.30 will act as a pivotal point for POPCAT to attract fresh liquidity.
The recent 10% depreciation in its value coincided with a bearish MACD crossover, implying that the pullback could continue until Bitcoin reaches a temporary low. This could prompt a shift in focus back to POPCAT from other meme coins.
Alternatively, traders opting to capitalize on other meme coins, which have posted weekly gains exceeding 20%, might further hinder POPCAT’s recovery from its downtrend.
Therefore, vigilant monitoring of the meme coin market is imperative. If other meme coins begin to decline, it could present an opportune moment for POPCAT to draw in liquidity, setting the stage for a potential new all-time high.