MemeCore’s Rally Heats Up: Divergence Could Influence M's Breakout

MemeCore's rally heats up - THIS divergence could decide M’s breakout

MemeCore [M] has been experiencing significant price movements, becoming the fourth-largest memecoin by market capitalization. A combination of renewed buying activity, increased trading volume, and notable technical indicators suggests that the token may be poised for further gains, potentially reaching key resistance levels.

Key Takeaways

Spot outflows and a 40% increase in derivatives volume boosted the price near $2.23, with potential for a retest of $2.50.
The RSI is at 56 and nearing a DMI crossover, indicating strong momentum.
MemeCore saw a price increase of 10.13%, hitting highs of $2.28 before settling at $2.23.
Trading volume increased by 43% to $19.4 million, contributing to a market cap rise to $2.35 billion.

Buyers Back in the Spot Market

Following a quick round of profit-taking, buyers have returned to the market with renewed enthusiasm. The latest spot activity underscores this trend. According to CoinGlass, MemeCore’s Netflow decreased to -$26.9k from +$8k the previous day, indicating higher token outflows but also accumulation by investors.

M spot netflow
Source: CoinGlass

History shows that sustained outflows often precede price rallies, suggesting that traders are relocating tokens from exchanges for long-term holding. This accumulation hints at a positive sentiment among derivative traders.

Derivatives Market Gains Momentum with Futures Inflows

The Futures market also experienced a capital influx as traders began to position themselves for potential short-term swings. Data from CoinGlass reveals that derivatives volume rose by 40.75% to $69.2 million, and Open Interest increased by 5.66% to $54.95 million. An increase in both metrics typically indicates that new positions are entering the market.

Memecore derivatives
Source: CoinGlass

Futures inflows surged to $10.69 million compared to $10.28 million in outflows. Consequently, Futures Netflow saw a dramatic increase of 187% to $406k, indicating a significant influx of funds into the Futures market. This rise in capital flow points toward traders establishing either short or long positions.

M Futures flows
Source: CoinGlass

Interestingly, analysis of the derivatives market revealed that investors were mostly inclined to bet against the market, as evident from the Long/Short Ratio across major exchanges, which stood below 1.0 at 0.88. This suggests a more bearish outlook among futures traders. However, top traders on Binance were an exception, showing a ratio above 2.6, indicating a selective optimism among high-volume accounts. This divergence between retail and institutional traders is contributing to a mixed sentiment in the short term.

MemeCore’s Technical Setup Favors Bullish Outlook

According to analysis from AMBCrypto, MemeCore’s rally is supported by significant capital inflows in both the spot and futures markets. On the daily chart, the RSI has reached 56.22, exceeding its signal line at 49.27, which is a mild bullish indicator.

Memecore RSI & DMI
Source: TradingView

For this uptrend to gain strength, the Directional Movement Index (DMI) must establish a positive crossover between the +DI (18.69) and -DI (19.43) lines. If this occurs, MemeCore could aim to retest the $2.30 level and potentially reach the $2.50 resistance. Conversely, if market sentiment shifts negatively, prices might retreat towards the $1.90 support level.