Simon’s Cat crypto up 12% in a day, 86% in 3 – What’s behind the surge?
On the 21st of October, it skyrocketed from the range's lows after Binance announced the token's listing on its derivatives market.
- Simon’s cat crypto has a strongly bullish momentum and volume
- The divergence the meme exhibited close to the two-month range high could see a pullback
Simon’s Cat [CAT] saw a huge rally this week. The meme coin had been trading within a range since mid-September. On the 21st of October, it skyrocketed from the range’s lows after Binance announced the token’s listing on its derivatives market.
At press time, CAT was trading just 6.4% below the range highs. However, there was a divergence between the price and momentum. Will Simon’s cat crypto see a deep retracement?
Signs of overextension
The range formation (purple) extended from $0.0000236 to $0.0000466. The mid-point of this range was at $0.000035 and has served as both support and resistance in the past two months.
The Money Flow Index is sometimes referred to as the volume-weighted RSI, since it incorporates trading volume as well as price data. The oscillator formed lower highs in the past two days while the price surged higher.
This is a bearish divergence and is a sign that the price would likely see a pullback soon. Given its proximity to the range highs, a rejection from the $0.0000466 level is likely.
The $0.000038 and $0.000035 support levels would likely present a good buying opportunity in case of rejection.
Open Interest and funding rate trends
While the price of Simon’s cat crypto nearly doubled since Monday, the Open Interest has increased by around 500%. It was at $6.7 million on the 21st, and stood at $36 million at press time.
Read Simon’s Cat’s [CAT] Price Prediction 2024-25
However, the funding rate has cooled down in the past 48 hours. This showed that bullish sentiment was losing the strength it showed earlier in the week.
Overall, the sentiment was still bullish, but a pullback toward the mid-range level is likely.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
