Key Takeaways
cat in a dogs world [MEW] surged 22% to hit a 2-month high of $0.004 before retracing to $0.0039 by press time. The memecooin faces strong sell-side pressure amid soaring profit taking.
cat in a dogs world [MEW] rallied 22% completing a breakout from a multi-month downtrend. The uptick saw MEW hit a 2-month high of % 0.00406% before slightly retracing to $0.0039 by press time.
Over the same period, trading volume surged by a substantial 522.9% to $284 million, while the market capitalization rose to $349 million, representing an 18% increase.
Typically, when volume and market cap rise, it signals growing on-chain activity and capital inflow.
But, is this a speculative bubble or the start of a sustained uptrend?
Futures drive MEW’s rally
Interestingly, amid positive sentiment in the crypto market, investors rushed into the market to bet on MEW’s next move.
Source: Coinalyze
As such, Open Interest jumped by 57% to $48.36 million, while Derivatives Volume surged by 695% to $358 million. When these two rise in tandem, it reflects growing participation in Futures.
As a result, MEW’s Funding Rate surged to 0.0046, a flip from negative the previous day. A positive Funding Rate reflects a higher demand for long positions.
Source: Coinalyze
Longs soared to reach 63.8% while shorts accounted for 38% of the total Futures accounts. This implies that most investors are aggressively betting on prices to rise.
Profit takers rise
Notably, as cat in a dogs world surged, so did the appetite for investors who have been underwater to cash out. When we examine capital flows, holders have rushed into the market to realize profit.
According to CoinGlass, MEW recorded two days of consecutive positive Exchange Netflow. At press time, Netflow was around $1.57 million, a $500k increase from the previous day.
Source: CoinGlass
Typically, when Exchange Netflow turns positive, it suggests that investors are selling more than they are buying. Additionally, the same pattern emerged when we examined the Aggregated Spot Buy Sell Volume.
According to Coinalyze, on the 16th of July, buyers dominated the market, scooping up 13.09 million tokens. This buying pressure pushed the memecoin for a breakout.
Source: Coinalyze
However, on the 17th of July, power dynamics shifted drastically, and sellers outpaced buyers. As such, Sell Volume spiked to 31.36 million compared to 23.94 million Buy Volume.
As a result, the market recorded a negative Sell-Buy Delta of 7.42 million tokens, indicating aggressive selling.
MEW at a crossroads
According to AMBCrypto’s analysis, MEW saw a strong upswing as investors rushed into the market to take futures positions.
As a result, the memecoin’s Stochastic RSI 92 is reaching overbought territory. At the same time, Directional Movement Index (DMI) surged to 52, signaling strong upward momentum.
Source: TradingView
When momentum indicators rise, it suggests the current trend is strong, and it’s likely to continue.
That said, for the uptrend to continue, buyers need to reclaim the narrative and displace sellers. In doing so, buying pressure will boost MEW to reclaim $0.004 and target $0.448.
However, the sell-side risk is more dominant than ever. If profit takers continue at the current pace, downward pressure will intensify, and MEW will drop to $0.0033.
