Recent Price Action and Market Sentiment
FARTCOIN experienced significant selling pressure over the past 24 hours, declining by more than 10% and falling below the $0.36 level. This pullback has erased a portion of its recent gains, reducing its January performance to approximately 26% at the time of writing. The decline follows initial optimism that the first quarter could bring strong upside for the meme coin after a weak close to the previous year. Despite starting the year with a rally above $0.40, FARTCOIN has struggled to maintain its momentum, leading to questions about whether buyers can regain control of the price action.
Technical Breakdown and Liquidity Sweep
Technical indicators suggest that selling pressure intensified even after FARTCOIN swept sell-side liquidity near the $0.36 mark. This level had previously served as a strong support zone, but aggressive selling, potentially from larger market participants, led to a decisive breakdown. Momentum indicators further reinforced the bearish outlook. The MACD remained in negative territory, with its signal lines crossing below neutral levels. Concurrently, the On-Balance Volume (OBV) has been on a downward trend for two consecutive days, indicating persistent distribution. At press time, OBV was recorded at approximately -0.163 billion.
Should the weakness persist, FARTCOIN could potentially retrace its steps to the $0.27 region, which corresponds with its opening price for the year. However, liquidity sweeps are not always indicative of purely bearish sentiment. In some instances, they can be employed to remove weaker holders before a price reversal. For any bullish scenario to gain traction, FARTCOIN would need to achieve a strong daily close above $0.36, which could then reopen a pathway towards $0.40 and potentially higher levels.
Exchange Movements and Volatility
Recent on-chain data has introduced additional complexity to the market narrative. Data from Solscan reveals that exchanges such as Kraken and Gate.io transferred substantial amounts of FARTCOIN, with individual transfers averaging around $200,000, to Wintermute. These movements appeared to coincide with further sell-offs, as traders often interpret exchange-related transfers as signs of potential distribution. However, such activity does not necessarily confirm outright selling. In this particular scenario, Wintermute later utilized the transferred tokens for liquidity provision, which likely contributed to the heightened volatility and the short-term price decrease.
If further distribution occurs, downside pressure may continue. Nevertheless, the presence of increasing buy-side activity suggests that the market may be attempting to find stability.
Emerging Signs of Buyer Interest
Derivatives data is now pointing towards early indications of renewed interest from bullish market participants. According to CoinGlass, funding rates have turned positive, accompanied by a rise in open interest. This suggests that buyers are becoming more inclined to pay a premium to hold long positions. Several major exchanges have reported positive funding rates, with Hyperliquid and KuCoin recording figures of 0.01% and 0.0119%, respectively. These metrics indicate a gradual re-entry of long traders into the market.
While this shift suggests that the recent decline might be temporary, a degree of caution is still advised. Sellers were successful in decisively breaking through the support level near $0.35, and any unsuccessful recovery attempts could invite further downside before a sustainable rebound can materialize.