Simon’s Cat [CAT] experienced a significant surge in value recently. This cryptocurrency had been trading steadily since mid-September until it witnessed a remarkable upward trend on October 21st following the announcement of its listing on Binance’s derivatives market.
As of the latest update, CAT was trading only 6.4% below its recent peak. Nonetheless, there appears to be a disparity between the coin’s price and its momentum. Could a significant retracement be on the horizon for Simon’s cat crypto?
Indications of Overextension
The price range (highlighted in purple) ranged between $0.0000236 and $0.0000466, with its midpoint at $0.000035, which has functioned as a significant support and resistance level over the past couple of months.
The Money Flow Index, akin to the volume-weighted RSI, considers trading volume along with price data. Interestingly, the oscillator has been forming lower highs in recent days while the price of the coin has been climbing higher.
This bearish divergence suggests a potential pullback in the price soon. With the price nearing the range highs, a probable rejection around the $0.0000466 mark seems likely.
In the event of rejection, the $0.000038 and $0.000035 levels are anticipated to offer attractive buying opportunities.
Trends in Open Interest and Funding Rates
Despite Simon’s cat crypto’s value almost doubling since the beginning of the week, the Open Interest has surged by approximately 500%, soaring from $6.7 million on the 21st to $36 million currently.
Conversely, the funding rate has cooled off in the past two days, indicating a waning bullish sentiment from its earlier strength earlier in the week.
While the overall sentiment remains largely positive, a correction towards the mid-range level seems plausible in the near term.
Disclaimer: The opinions expressed herein are solely the writer’s and do not constitute financial, investment, or trading advice