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- MOODENG has formed a double-top pattern on its one-day chart after dropping by 35% in the last seven days.
- If buyers fail to step in, the memecoin could drop further towards $0.134.
Moo Deng [MOODENG], a memecoin based on the Solana [SOL] blockchain, has dropped by 7% in 24 hours and was trading at $0.256, at press time. MOODENG dipped by more than 35% in the last seven days.
MOODENG’s decline mirrors the drawdown across the broader market, which has led to more than $1.5 billion being liquidated within two days per Coinglass.
This pullback was caused by the hawkish stance of Federal Reserve officials during the Federal Open Market Committee (FOMC) meeting.
As these bearish trends persist, how far is MOODENG’s recovery?
Bearish pattern signals more dips ahead
A double-top pattern has emerged on MOODENG’s one-day chart, suggesting bearish trends could continue. The memecoin breached crucial support at the neckline at $0.341 and formed a sell signal, pushing prices lower.
As the downtrend persists, MOODENG could drop to the key support level of $0.134. If this support holds, buyers could step in, leading to a rebound. Conversely, if MOODENG breaks through, it could cause more dips.
Source: TradingView
The Chaikin Money Flow (CMF) indicator showed that selling activity was rising. This metric has formed lower lows, indicating that buyers are not stepping in to support a rebound.
The Directional Movement Index (DMI) also highlighted the prevailing bearish trends. The positive Directional Indicator (DI) has shifted below the negative DI.
However, the Average Directional Index (ADX), which was tipping south, showed that the bearish trends were weakening.
This scenario could see MOODENG enter into range-bound consolidation. Additionally, if buyers step in, a bullish reversal could happen.
Falling Open Interest suggests…
MOODENG’s Open Interest(OI) hit a peak of $304M in mid-November as the price rallied to an all-time high of $0.69. At the time, speculative interest was high as traders increased their bets on the memecoin.
However, MOODENG’s OI has since dropped and stood at $94M, at press time. This shows that derivative traders have closed their positions and exited the market.
Source: Coinglass
This drop also shows a bearish sentiment. At the same time, it could lead to reduced volatility for MOODENG and push the price into range-bound consolidation.
Short sellers dominate the market
The Long/Short Ratio for MOODENG dropped to 0.89, indicating that short sellers are more than long buyers. This depicts a bearish state where many traders anticipate that the price will continue to decline.
Source: Coinglass
Read Moo Deng [MOODENG] Price Prediction 2024-2025
However, if there is a sudden surge in short positions, it could cause a short squeeze if the price makes a sudden and unexpected recovery.
A sudden closure of short positions increases the buying pressure that will push prices higher.
