Following a peak of $0.71 just 48 hours ago, Fartcoin [FARTCOIN] has undergone substantial downward pressure, plummeting to as low as $0.48.
Despite a moderate recovery from this bottom, the meme-based cryptocurrency is encountering significant selling pressure.
As of the latest data, Fartcoin is being traded at $0.52, indicating a 5.42% daily decline and a staggering 49.23% downturn over the month.
Given the struggles faced by Fartcoin in maintaining an upward trajectory, it is crucial to delve into the underlying causes of this downturn.
Is the selling pressure overpowering Fartcoin?
According to an analysis by CryptoCrypto, Fartcoin is grappling with increased sell-offs, particularly from major investors.
This sell-off trend seems to be primarily driven by large holders, with data from Lookonchain revealing a whale engaging in significant selling activities. This particular whale offloaded its entire 4.09 million Fartcoin tokens for $2.26 million, incurring a loss of $2.21 million in the process.
When a whale decides to sell at a loss, it indicates a lack of confidence in market conditions, signaling a prevailing bearish sentiment that may hinder a potential recovery.
Moreover, the uptick in selling pressure is evident in the spike of spot netflow to $125.7k.
A positive netflow signifies that the amount of cryptocurrency flowing into exchanges exceeds those being withdrawn, implying a higher rate of selling among holders.
This bearish transition is further confirmed by the sustained negativity of Fartcoin’s Weighted Sentiment in the past week.
Such prolonged bearish sentiment suggests a predominant influence of sellers in the current market scenario.
Furthermore, Fartcoin’s Relative Strength Index (RSI) has experienced a downward reversal and is on the verge of a bearish crossover, dropping from 42 to 40, with a 40-day Moving Average (MA).
This decline in RSI implies a seller-driven market dynamic where buyers are seemingly outnumbered.
The ROI for Fartcoin has dwindled, now falling below that of risk-free assets, leading to a negative Sharpe Ratio.
This negative value indicates that investors are not adequately compensated for holding Fartcoin, diminishing its attractiveness as an investment option.
Fartcoin is currently under significant downward pressure due to the dominance of sellers in the market, showcased by whales selling at a loss, reflecting the prevailing bearish sentiment.
If the current market conditions persist, Fartcoin could potentially drop to $0.46, although a reversal might see the cryptocurrency reclaim $0.60.