MemeCore Faces $11.1M Short Bets as Price Drops 30%

Summary: The memecoin market is experiencing significant challenges, leading to a sharp 30% decline in the price of MemeCore [M]. Investors appear to be withdrawing their support amid a bearish trend dominated by short traders, raising concerns about the cryptocurrency's future performance.

Key Takeaways

MemeCore's price has dropped by 30% due to bearish market sentiment.
A notable $11.1 million in short bets has entered the market within the last 24 hours.
Investor optimism has shown signs of recovery, with an increase in Community Sentiment data from 32% to nearly 64%.
MemeCore is approaching a critical demand zone that may offer a potential price bounce.
Current market conditions suggest the likelihood of further downside if bearish momentum persists.

MemeCore plunges 30% as shorts dominate—Will demand M demand zone hold

Market Demand Weakness for MemeCore

The broader memecoin marketplace is facing difficulties, reflected in a 5.6% decline overall. As a result, investors are removing MemeCore from their watchlists. Currently, MemeCore [M] has experienced a significant drop of 30%, according to data from CoinMarketCap.

Dominance of Short Trades

The prevailing bearish sentiment has become increasingly pronounced as short traders capitalize on the downward trend. This situation can be evaluated through the weighted averages of the Funding Rate and Open Interest (OI) within the market. As of now, the OI-Weighted Funding Rate has turned negative at -0.4946%. Such a negative reading indicates a strong bearish outlook, with most contracts being managed by short traders.

M open interest weighted funding rate. Source: CoinGlass

This bearish trend is largely driven by a recent influx of $11.1 million in new short bet capital. However, early indicators suggest that investor sentiment may be shifting, influenced by a growing number of bullish traders.

MemeCore’s Demand Zone Analysis

The recent decline in MemeCore’s price has brought it close to an important demand zone on the chart, which suggests that a potential rebound might be on the horizon. With the help of Bollinger Bands, it appears that M has entered the lower band area, historically associated with increased buying pressure and often leading to asset rallies. This aligns with a demand Fair Value Gap (FVG) zone that has been marked on the chart, indicating areas with unfilled buy orders, thus bolstering short-term bullish expectations.

M trading chart. Source: TradingView

Despite these indicators, a price rally hinges on confirming signals from the Parabolic Stop and Reverse (SAR) indicator, which uses dot patterns to reflect market momentum. At this time, the Parabolic SAR has displayed dots above the price, suggesting continued downward pressure, which could potentially drive M towards the $1 region, even as it remains within the demand zone.

Market Dynamics and Risks

As selling pressure from retail investors persists, the chances of further price declines are increasing. The total market volume currently stands at $40.15 million, with retail involvement contributing around $40,000 in sales. While this amount is relatively minor in comparison to derivatives trading, it nevertheless indicates the potential for additional downward movements.

Spot exchange netflow. Source: CoinGlass

This data reinforces the notion that derivatives traders continue to hold sway over the market's direction. Until sentiment improves among this trading group, the likelihood of bearish momentum remains high, increasing the risk of additional price declines.

Conclusion

In summary, the current market landscape for MemeCore is troubling, with strong bearish signals and the influence of short traders dominating investor sentiment. However, the proximity to a demand zone and signs of shifting optimism suggest that the situation may reverse if conditions improve. Investors should remain vigilant as market dynamics evolve.