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FARTCOIN falls 10%, cracks below $0.36 – Was this a liquidity trap?

Exploring why FARTCOIN's fall may be a blessing in disguise for traders.

FARTCOIN falls 10%, cracks below $0.36 - Was this a liquidity trap?

FARTCOIN crashed more than 10% in the past 24 hours, falling below the $0.36 mark.

This decline reduced its January returns to about 26% as of press time, despite earlier beliefs that Q1 could yield significant gains following a weak close to the year 2025.

The memecoin opened the year with a rally past $0.40, though it has failed to live up to the expectations. That said, can buyers step in and reverse the declining price action?

Price weakens more after liquidity sweep

The charts showed FARTCOIN’s price was extending its decline even after sweeping the sell-side liquidity at $0.36. Initially, this level had held strongly, but the sellers and probably market makers forced a breakdown.

This weakness was evident on the MACD, which was red with signal lines crossing below the neutral level. Furthermore, the On Balance Volume (OBV) had been falling for the past two days.

Its reading was negative $0.163 billion when writing.

Continued decline could see FARTCOIN revisit levels around $0.27, this year’s open price.

FARTCOIN
Source: TradingView

Conversely, the liquidity sweep could be a strategy to take out weak holders. Institutions and whales manipulate price by doing so and then push it in the opposite direction.

However, a green candle close above $0.36 was necessary to bet on price trading back to levels around $0.40 or higher.

With that in mind, it was worth analyzing the recent exchange activities.

What do the exchange activities mean?

The data from Solscan showed that Kraken and Gate.io had moved tokens to Wintermute, averaging about $200K in FARTCOIN in different batches.

This activity elicited sell-offs from other participants, bearing in mind that the memecoin was still up 26% in January. The reasoning behind this decision was that traders follow what exchanges do, as they are more savvy.

The withdrawal did not only mean exchanges were selling but also could be advantageous for traders. This is because Wintermute further deposited these tokens for liquidity provision.

FARTCOIN
Source: Solscan

The latter explained the decline in price of FARTCOIN. If the selling was planned, the memecoin’s price could continue to fall. However, buyers were starting to step in.

Are buyers stepping in?

The data from CoinGlass showed that Funding Rates had turned green alongside Open Interest (OI). This meant that buyers were paying sellers to close their orders.

Most popular exchanges were green. The highest readings on the Hyperliquid and KuCoin exchanges were 0.01% and 0.0119%, respectively. These values meant that buyers were stepping back into trading the memecoin.

Source: CoinGlass

With the liquidity sweep and buyers returning gradually, the price fall could be short-lived. However, there was a need to be wary of the sellers’ force that broke down the support level at $0.35.


Final Thoughts

  • The price of FARTCOIN crashed below a key support level as exchanges transferred tokens to the Wintermute market maker. 
  • FARTCOIN could be shaping for a bullish reversal after the liquidity sweep and buyers stepping back. 
Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.

Lennox Gitonga

Journalist

Lennox Gitonga is a Financial Market and On-Chain Analyst at AMBCrypto with a Bachelor of Commerce in Finance. As a former equities trader, he applies traditional market rigor to crypto, delivering clear technical and on-chain analysis that explains price action, liquidity, and network behavior driving digital asset trends.

AMBCrypto was founded in 2018 with a mission to simplify and bring the latest blockchain and cryptocurrency news to our readers. We have quickly grown into the digital news source for an emerging generation of cryptocurrency enthusiasts, reaching more than a million readers on a monthly basis, across the globe.