PNUT, also known as Peanut the Squirrel, experienced a rapid surge earlier this month, followed by a gradual decline over the past week. Traders are closely monitoring the crucial levels of $1.5 and $1, with the former relinquishing its status as a reliable support level.
During a period when Bitcoin [BTC] was hovering around $97k, just shy of hitting $100k, the general sentiment in the crypto market was strongly bullish. While Bitcoin is expected to continue its upward trajectory, PNUT might face a phase of retracement in the days ahead.
PNUT Retraces by 50%
Examining the 4-hour chart, PNUT showed signs of losing momentum. Despite the bulls’ efforts to defend the $1.5 range since November 14th, a week-long bearish pressure eventually pushed the prices lower.
Fibonacci retracement levels identified $1.29, $1, and $0.6 as critical support levels for investors in PNUT. The Relative Strength Index (RSI) on the 4-hour chart dipped below the neutral 50 level, indicating a favorable momentum shift towards the bears.
This development might result in a downward movement towards $1 and potentially $0.6, supported by the On-Balance Volume (OBV) indicator, which failed to sustain levels seen in the previous week. The decline in OBV underscored heightened selling pressure, increasing the likelihood of a retracement towards the $1 mark.
Short-Term Bearish Sentiment in Speculative Markets
Observing the declining spot Cumulative Volume Delta (CVD) over the past week hinted at weakening demand in the spot market. This trend, coupled with the diminishing funding rate and a drop in Open Interest from $318 million to $261 million within four days, underscored short-term bearish sentiments.
Collectively, these indicators pointed towards a reduced bullish outlook in the lower timeframes, as PNUT’s slow but steady decline deterred speculators from taking long positions, despite the imminent milestone of Bitcoin hitting $100k.
Disclaimer: The opinions expressed in this content are personal views and should not be considered as financial, investment, trading, or any other form of advice.