Fartcoin bulls liquidated as price drops to $1.10 – What’s next?

Key Takeaways 

Fartcoin dropped 14% bringing its pullback to 34% and triggering the second-largest long liquidations since March. But broader accumulation spiked 11% in July. 

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Fartcoin [FARTCOIN] dropped 14% on the 28th of July, triggering its largest long liquidation since March. According to Velo data, about 7.7 million Fartcoins were wiped out in the Futures market. 

This was about twice the flush seen on the 4th of March, underscoring it a key pain point for leveraged bulls during the extended decline on the 28th of July. 

But this could also be a great market reset for a renewed bid to push the memecoin higher. 

Will the post-March liquidation rally repeat?

In most cases, such a massive flush out of excess leverage always offers a healthier market reset with reduced liquidation risk.

In fact, one analyst noted that the memecoin price surged over 600% after March’s long liquidation. 

While the exchange sell pressure also spiked 16.86% during the Monday dump, if history repeats, the decline could be a great discount buying opportunity. 

In fact, Nansen’s data showed that supply owned by holders surged to 59% from 58.6% during the pullback.

When zoomed from the beginning of July, the supply owned has increased from 48% to 59% — About 230 million Fartcoin acquired, or an 11% increase in demand.  

This meant that there has been a massive accumulation, and the recent dump has not slowed this strategic bidding. 

On the market positioning front, bulls slightly trimmed their positions from 66% to 64%, but the overall skew remained positive.

In other words, based on data as of press time, leveraged bulls still expected a rebound at current levels, hence have not unwound most of their long positions after the recent drop.

But will their bullish bets and recovery hopes come true? 

On the price chart, the memecoin has dropped 34% from $1.69 to $1.1. But the pullback hit a key support at $1.1 (cyan), with another potential demand zone at $0.90 below it.

Put differently, these are the next key levels to watch for a potential price reversal to the upside. 

In addition, the daily RSI cracked below the neutral level, further underscoring bears’ market edge ahead of the Fed rate cut decision. 

While FARTCOIN could rebound at the $1.1 or at the range lows, the Fed rate decision could drive short-term volatility in either direction.

But the long-term holders appeared bullish, going by the 11% jump in accumulation in July.