Earlier this month, the broader cryptocurrency market experienced a significant uptick, leading to a surge in most memecoins and the attainment of new highs and ATHs. POPCAT was among these coins, reaching a new ATH of $2.07 on the trading charts.
However, a notable trend reversal has been observed in the memecoin since then, indicating a possible downtrend in the near future.
Currently, POPCAT is trading at $1.72, reflecting a 5.37% decrease in value over the past 24 hours. This decline signifies a 22.71% drop from its recent peak of $2.07 three days ago. Prior to this correction, the cryptocurrency had experienced successive gains, with a 19.55% increase on the weekly charts and a 24.64% rise on the monthly charts.
Therefore, the key question arises: Is this decline a temporary correction or an indication of a sustained bearish trend?
Analysis of POPCAT’s Performance
Analysis from CryptoCrypto indicates that the market sentiment surrounding POPCAT has shifted from bullish to bearish, primarily due to escalating selling pressure.
This shift is evident in the Relative Strength Index (RSI) of POPCAT, which dropped from 66 to 53 within the past week. Furthermore, the RSI-based Moving Average (MA) signaled a bearish crossover as it moved above the RSI to reach 56.
These factors suggest a prevailing selling pressure in the market, with sellers currently dominating the scene. Increased selling pressure typically leads to a decline in prices.
The emergence of a declining +DI, falling to 17 subsequent to a bearish crossover that left the Average Directional Index (ADX) at 24, provides further confirmation. This indicates a loss of momentum in the altcoin’s uptrend, coupled with strengthening bearish pressures across the market.
Moreover, the influx of assets into exchanges highlights the intensified selling pressure. Data from Coinglass reveals positive spot netflows over the last four days, implying that investors are transferring their holdings to exchanges for selling purposes, potentially to maximize profits.
Additionally, a dominance of short position holders in the market indicates a prevalent sentiment of anticipating price declines among most investors, as evidenced by the long/short ratio.
Notably, there has been a surge in the liquidation of long positions over the past week, indicating a trend of forceful closures initiated by holders lacking confidence in the prevailing trend. This trend has persisted, as holders opt to exit their positions rather than pay premiums to maintain them.
Future Outlook for POPCAT
In essence, the current market conditions suggest a looming downtrend for POPCAT in the short term. If this sentiment remains steady, the next crucial support level for the memecoin’s price is likely around $1.37.
However, in the event that bulls regain control of the market, the downward trajectory could represent a mere temporary retracement, pushing the price back towards $1.97. Any resistance above this mark is anticipated to be minimal, potentially paving the way for POPCAT to achieve another ATH.