POPCAT has been on an upward trend according to the daily chart, establishing a higher low at $1.28 on the 25th of October. Although there was a slight slowdown in momentum around that period, the coin managed to achieve a higher high in recent days.
Bitcoin’s recent correction from $72.7k caught many overly optimistic bulls off guard. POPCAT also experienced a 14.45% decline over the past three days, but there is a possibility that it could uphold its upward momentum.
Market Analysis Favors POPCAT Bulls
The market tested the 23.6% Fibonacci extension level before the correction occurred. With continuous higher highs and higher lows, the market structure has maintained a bullish stance. However, a daily close below $1.28 could signal a bearish shift in the structure.
To observe a bearish trend reversal, the establishment of a new lower high and lower low is crucial. This would indicate that POPCAT might be gearing up for a pullback, potentially dipping below the $1 threshold.
Currently, the market does not show signs of this scenario. The CMF indicates a significant inflow of capital with a reading of +0.05. Additionally, the Awesome Oscillator has been underlining bullish momentum in the memecoin since the second week of September.
Declining Open Interest Indicates Uncertainty
Last week’s price surge above $1.5 led to a gradual increase in Open Interest. However, the subsequent correction starting from the 30th of October resulted in a decline in OI alongside the price. This reflects a bearish outlook in the Futures market.
Moreover, the spot CVD also saw a notable decrease during the same period. The combination of lukewarm interest from buyers in both the Spot and Futures markets signals a bearish sentiment in the short term, despite the bullish signals in higher timeframes.
The funding rate nearing zero is another indication of weak bullish sentiment. Traders are advised to be cautious in the coming week, especially with the upcoming 2024 elections in the United States introducing an element of uncertainty that the market typically dislikes. Clarity in price trends is expected post the resolution of this significant event.
Disclaimer: The views expressed here are solely the author’s opinion and should not be interpreted as financial, investment, trading, or any other form of advice.