During the first half of October, the Solana-based meme cryptocurrency, POPCAT, showed strength by approaching a potential new all-time high of $1.5. However, a sudden drop of more than 10% within a week brought its value back to the $1.20 range.
Interestingly, this decrease coincided with Bitcoin surpassing the $66k mark, a movement that usually leads to an influx of liquidity into top-tier meme cryptocurrencies. Despite POPCAT’s market cap of $1 billion, it struggled to attract attention.
Consequently, analysts at CryptoCrypto are now speculating if this correction was a deliberate strategy to shake out weaker investors, potentially setting the stage for POPCAT to make another attempt at reaching a new all-time high.
Factors Impacting POPCAT’s Ability to Attain a New All-Time High
In early October, Bitcoin made a modest 2% increase in value over three days, bringing it close to $62k. This volatility sparked interest in newer meme coins that promised higher returns.
Among these, POPCAT had a standout performance, recording daily gains exceeding 10% and hitting a new all-time high of $1.5. However, as Bitcoin regained momentum and surged to around $67k, the more established meme coins reclaimed their dominance, surpassing the newer entrants.
The decrease in trading volume further emphasized this trend, falling from a peak of $800 million to $500 million, contributing to POPCAT’s recent 10% decline.
Over the past week, liquidity has shifted towards older meme coins as Bitcoin holders redistributed their profits, leading to liquidity outflows for POPCAT.
It’s worth noting that this recent slump might be a temporary setback rather than a continuous pattern in every bullish cycle. Furthermore, the drop in price followed a surge in large purchases of POPCAT by whales, suggesting that the decline occurred once the coin reached its new high, prompting weaker investors to exit.
Although this shakeout could pave the way for POPCAT to achieve a new all-time high by the cycle’s end, the growing dominance of its competitors could present a significant challenge.
Profit Seizures by Traders from Alternative Meme Coins
Typically, a temporary low forms after each decline, offering an entry point for new buyers seeking to take advantage of the dip and acquire assets at a discounted rate.
While a neutral Relative Strength Index (RSI) implies potential growth, other indicators do not indicate that $1.30 will act as a viable opportunity for POPCAT to draw in fresh liquidity.
The recent 10% decrease aligned with a bearish Moving Average Convergence Divergence (MACD) crossover, suggesting that the pullback may persist until Bitcoin reaches a local low. This scenario could result in a shift of focus back to POPCAT from other meme coins.
Alternatively, traders opting to capitalize on other meme coins, which have seen weekly gains exceeding 20%, might further impede POPCAT’s recovery from its downturn.
Therefore, vigilant monitoring of the meme coin market is crucial. Should other meme coins start to falter, it could create a favorable opportunity for POPCAT to attract liquidity, potentially setting the stage for a new all-time high.