Capital indeed flows where attention goes. After the events over the weekend, US President Donald Trump was in the headlines.
The crypto memecoin Official Trump [TRUMP] was also making gains.
The token was up 8.6% in the past 24 hours, and Coinalyze data showed TRUMP saw a 35% jump in Open Interest. Speculative activity has helped drive the rally higher, but this might not last long.
World Liberty Financial [WLFI] token was also up by 10% in 24 hours.
Assessing the longer-term TRUMP trend
In April, TRUMP token saw a 90% rally to reach $16.4. Since then, it has been on a persistent downtrend, with an occasional relief rally. The most recent one came toward the end of October.
TRUMP rallied 72% in under three weeks in October, going from $5.55 to $9.57. That move, too, was fully retraced.
The pattern could repeat once again.
Contextually speaking, the recent bounce from $4.68 to $5.46 began on Thursday, the 1st of January. The market-wide short-term optimism as Bitcoin [BTC] prices bounced past $90k in the past few days was felt in the TRUMP chart, too.
However, this was not enough to reverse the long-term downtrend of Official Trump. The RSI showed bearish momentum remained dominant, and the CMF was at -0.32 to indicate heavy selling pressure.
Is a bullish reversal possible?
Theoretically, it is. Bitcoin strength and a massive memecoin rally to start the new year could drive TRUMP token prices to $8 and higher.
Such an explosive breakout should be treated as the less likely outcome.
Traders’ call to action- Take profits and stay sidelined
The 4-hour chart showed that the local resistance at $5-$5.1 has been overcome. This R/S flip, if retested, could offer a buying opportunity.
Alternatively, a breakout past $5.6 and retest as support could also give a buying opportunity, but it would have more risk.
Moreover, the H4 structure would shift bearishly upon a move below the $4.94 swing low.
The higher timeframe trend did not favor the bulls, but the short-term sentiment did. Traders wanting to go long should plan their exit strategy with extreme care and always have clear invalidations.
Final Thoughts
- The Official Trump memecoin rally was unexpected and a welcome relief for traders.
- Going long can be profitable, due to the lower timeframe demand and momentum, but traders should not expect a long-term trend reversal.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.