Simon’s Cat, known by the symbol CAT, witnessed a significant upsurge in the current week. This digital asset, categorized as a meme coin, had been trading in a limited range since the middle of September. However, on the 21st of October, it experienced a remarkable boost from the lower limits of the range following an announcement by Binance regarding the token’s debut on its derivatives market.
As of the latest update, CAT is trading only 6.4% below the higher boundaries of the established range. Nonetheless, an interesting discrepancy emerged between the price movement and the momentum. Is there a possibility of a considerable decline in the value of Simon’s Cat crypto?
Indicators of Excessive Expansion
The established range (depicted in purple) stretched from $0.0000236 to $0.0000466. The midpoint of this range at $0.000035 has previously functioned as both a support and a resistance level over the past two months.
The Money Flow Index, often known as the volume-weighted RSI due to its inclusion of trading volume with price data, has delineated lower peaks during the last two days despite the upward surge in price.
This bearish divergence suggests a probable upcoming price retracement. Given the close vicinity to the range’s upper limits, a probable rejection from the $0.0000466 mark seems plausible.
In case of rejection, the support levels at $0.000038 and $0.000035 are likely to offer favorable buying opportunities.
Trends in Open Interest and Funding Rates
While the price of Simon’s Cat cryptocurrency nearly doubled since the beginning of the week, the Open Interest has soared by approximately 500%. Starting at $6.7 million on the 21st, it has surged to reach $36 million at present.
However, the funding rate has exhibited a decline over the last 48 hours, indicating a waning bullish sentiment compared to earlier in the week.
Overall, the prevailing sentiment remains positive, but a retraction towards the mid-range level appears probable.
Disclaimer: This content should not be considered as financial, investment, trading, or any form of advice and represents solely the viewpoint of the author.