FARTCOIN is tackling significant challenges following a 21% drop. Yet, a critical demand zone might hold the key to a potential bullish recovery. Let's delve into a detailed analysis of this scenario.
FARTCOIN has recently been hit by a significant liquidity outflow, affecting both spot and derivatives markets. Open interest (OI) has plummeted by more than 12% to $743 million, reflecting a net outflow of $89 million. This decline in OI coupled with falling prices suggests weakening investor sentiment in the derivatives market.
Additionally, the spot market has also recorded position outflows amounting to approximately $3.5 million, with funds shifting to other cryptocurrencies. This dynamic indicates that investors are turning away from this token in favor of other assets.
According to Sun Flow, more than $50 million in outflows from smart money have been recorded for the Fartcoin token over the last 30 days.
A notable correlation between FARTCOIN and Pump.fun (PUMP) suggests that liquidity might be redirecting toward the latter. Although the movements of both assets mirrored each other during the past week, recently, as FARTCOIN declined, PUMP has been rising, hinting at a possible influx of liquidity into this token.
However, this hypothesis has not yet been confirmed by on-chain data; only price movements suggest this possibility for now.
Despite these challenges, the daily chart of FARTCOIN shows that it has erased all its losses. On the 30-minute chart, this token is encountering a liquidity zone that may be protected by smart money. If the $1.12 level is broken decisively, FARTCOIN could target $1.27 in the short term.
In the medium term, the next protected high is located at $1.41. The massive liquidity zone between $1.30 and $1.40 could therefore form a local top for this Token and push it back down. However, a breakout above this level could propel the memecoin to the next resistance zone around $1.62. Here again, caution is advised, and a retracement should be expected.
Nevertheless, a break below the demand boundary at $1 could jeopardize this bullish outlook.
It will be important to monitor these zones in correlation with the 4H RSI. An overbought RSI on the 4H timeframe could be an indicator to take profits.
In summary, Fartcoin is on the verge of turning bullish in the short term if it breaks the resistance at $1.12. Currently at $1.09, the memecoin could increase by 27% to 45% in the coming days.
Here’s how to easily buy the memecoin on Bitget :
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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