- MOODENG has formed a double-top pattern on its one-day chart after dropping by 35% in the last seven days.
- If buyers fail to step in, the memecoin could drop further towards $0.134.
As a seasoned analyst with over a decade of experience in the crypto markets, I have seen my fair share of bull runs and bear markets. The current state of MOODENG [MOODENG] has me slightly concerned. The double-top pattern on its one-day chart is a clear bearish signal, and if buyers fail to step in, we could see this memecoin drop further towards the support level at $0.134.
At the moment of press, Moo Deng (MOODENG), a memecoin built on the Solana blockchain, is currently trading at $0.256 after experiencing a 7% decrease over the past 24 hours. Over the past week, MOODENG has seen a more significant drop of over 35%.
MOODENG’s drop in value follows a similar trend seen across the wider cryptocurrency market. Over the course of just two days, over $1.5 billion worth of assets have been sold off, according to Coinglass.
This withdrawal (or retreat) occurred as a result of the aggressive monetary policy views expressed by Federal Reserve officials during their Federal Open Market Committee (FOMC) discussion.
As these bearish trends persist, how far is MOODENG’s recovery?
Bearish pattern signals more dips ahead
On MOODENG’s daily chart, there appears a double-top formation, indicating that downward movements may persist. This popular coin broke through important resistance at its neckline value of $0.341, triggering a sell signal and causing prices to drop further.
If the current downward trend continues, Moodeng might reach its significant support point at around $0.134. Should this level hold firm, potential buyers may enter the market, triggering a possible recovery. However, if Moodeng breaches this support, it could lead to further price drops.
Based on the Chaikin Money Flow (CMF) indicator, there’s an increase in selling actions. This trend has resulted in forming successive troughs, suggesting that potential buyers may be reluctant to intervene and stimulate a recovery.
The Directional Movement Index (DMI) also highlighted the prevailing bearish trends. The positive Directional Indicator (DI) has shifted below the negative DI.
On the other hand, the Average Directional Index (ADX) was moving downwards, suggesting that the bearish tendencies were becoming less dominant.
In this situation, MOODENG might find itself in a period of sideways movement, known as consolidation. Furthermore, should buyers decide to join the market, a potential turnaround toward a bullish trend may occur.
Falling Open Interest suggests…
MOODENG’s Open Interest (OI) reached a record high of $304 million around mid-November, mirroring an all-time peak price of $0.69. During this period, there was a significant surge in speculative activity as traders aggressively wagered on the memecoin, reflecting their optimism and increased bets.
Meanwhile, MOODENG’s Open Interest (OI) has decreased significantly to approximately $94 million. This implies that derivative traders have likely closed their positions and departed from the market.
This drop also shows a bearish sentiment. At the same time, it could lead to reduced volatility for MOODENG and push the price into range-bound consolidation.
Short sellers dominate the market
In simple terms, the ratio of shares being sold short versus bought long for MOODENG has fallen to 0.89, suggesting that there are more short sellers compared to long buyers. This trend indicates a pessimistic outlook among traders, as they believe the price is likely to keep falling, or in other words, the market is bearish.
Read Moo Deng [MOODENG] Price Prediction 2024-2025
In contrast, if short positions experience a quick increase, a sudden price recovery that’s unexpected might trigger a “short covering” or “short-squeeze” situation.
A sudden closure of short positions increases the buying pressure that will push prices higher.
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2024-12-20 20:08