POPCAT falls by 10% as liquidity suffers – New ATH still within reach?

• POPCAT experienced a significant drop of over 10% in the past week, leading to a shakeout of weak hands.
• A resistance level on the charts is still posing a challenge for the coin.

Solana-based memecoin Popcat [POPCAT] had a strong start in October, approaching a new all-time high of $1.5 in the first two weeks. However, a sharp decline of over 10% brought it back to the $1.20 range.

Despite having a market cap of $1 billion, POPCAT failed to gain momentum despite Bitcoin’s surge past $66k, which typically boosts high-cap memecoins.

Analysts at AMBCrypto are speculating whether this pullback was a strategic move to shake out weak hands and set the stage for a new all-time high for POPCAT.

Factors Limiting POPCAT’s Potential for a New ATH

In early October, Bitcoin’s modest 2% increase sparked interest in newer memecoins with higher return potential. POPCAT stood out, reaching a new all-time high of $1.5.

However, with Bitcoin regaining momentum and traditional memecoins dominating the market, newer coins like POPCAT faced challenges, leading to a decline in trading volume and a 10% drop in value.

Older memecoins attracted liquidity as Bitcoin holders took profits, resulting in outflows for POPCAT.

Despite the recent decline, the increase in whale purchases of POPCAT suggests that weaker hands exited the market after the coin reached a new high.

While this shakeout could pave the way for a new all-time high for POPCAT, competition from rival coins remains a significant obstacle.

Profit Taking from Other Memecoins

After every pullback, a local low typically forms, creating an opportunity for new buyers to enter the market at a discounted price.

While the RSI indicates room for growth, other indicators suggest that $1.30 may not attract sufficient liquidity for POPCAT.

The recent 10% drop in value coincided with a bearish MACD crossover, indicating a potential continuation of the pullback until Bitcoin reaches a local low.

Traders capitalizing on other memecoins with significant gains could further hinder POPCAT’s recovery.

Monitoring the memecoin market closely is crucial, as a decline in other memecoins could create an opportunity for POPCAT to attract liquidity and potentially achieve a new all-time high.