Just a few days ago, Popcat (POPCAT) traders were fully invested in the Solana same coin, confidently betting on a price increase and reaping profits. However, after hitting a new all-time high on October 29, this sentiment changed.
Rather than maintaining their bullish positions, traders are now exercising caution. This on-chain analysis reveals everything that’s going on with the situation.
Popcat bullish sentiment fades
Today, November 4, Santiment data shows that Popcat’s funding rate has fallen into the negative zone. For context, the funding rate is the cost of holding an open position in the derivatives market.
When the funding rate is positive, traders with long positions pay funding fees to shortsand the average expectation is bullish. On the other hand, a negative funding rate indicates that shorts are paying longs and the overall sentiment is bearish, which is the case for POPCAT traders.
Essentially, the current funding rate combined with POPCAT price increase indicates that spot traders are aggressive, which is potentially bearish for the coin.
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Further evidence of this sentiment is presented in Open Interest (OI). The IO assesses the level of speculative activity around a cryptocurrency. When it increases, it means traders are opening more contracts and adding money to the derivatives market.
A decline in OI indicates that traders are increasingly closing their positions, which is bearish for the cryptocurrency in question. In the case of Popcat, the drop in OI combined with the price drop suggests that a recovery will be difficult for the meme coin, making a rise to $2 unlikely in the near term.
POPCAT Price Prediction: Lower Lows
On the daily chart, The price of POPCAT has fallen at $1.28. Additionally, the Parabolic Stop and Reverse (SAR) indicator is above the value of the meme coin. This technical indicator helps identify the direction of an asset’s price, signaling a potential downward trend for POPCAT.
When the dotted lines of the indicator are below the price, the trend is up. Currently, the dotted lines of the Parabolic SAR are higher than the POPCAT value.
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Given this position, Popcat traders might be right to exercise caution as the price could fall to $1.04. In a very bearish situation, the meme coin could drop to $0.85.
On the other hand, if purchasing pressure increases, the token could bouncepossibly going up to $1.82 or up to $2.
Disclaimer
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