The crypto market has extended its decline for another day, weighing on investor sentiment. Despite this, M, the native coin of MemeCore, the first Layer 1 blockchain for meme assets, has emerged as today’s standout gainer, noting 14% gains.
However, on-chain and technical readings suggest that the momentum may not be sustainable.
M’s Price Surge Meets Heavy Shorts
Readings from M’s daily chart paint a concerning picture. While its price continues to climb, the Chaikin Money Flow (CMF), a key indicator that tracks capital inflows and outflows, has dropped below the zero line and is trending downward.
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This creates a clear bearish divergence, where weakening liquidity cannot fuel further price gains. When such a divergence emerges, an asset’s price rally loses strength. It means that even though buyers are still pushing the price higher, capital inflow into the asset is declining steadily.
Moreover, the trend is no different among M’s futures traders, as reflected by its negative funding rate. According to Coinglass data, M’s funding rate has dropped to a 38-day low of -0.99%.
The funding rate is used in perpetual futures contracts to keep the contract price aligned with the spot price. When the rate turns negative, short traders (those betting on price declines) dominate and are paid by long traders (those betting on a rally) to maintain their positions.
M’s low funding rate highlights strong bearish sentiment in the derivatives market. Despite the current rally, its futures traders are overwhelmingly positioned for a downside move. This shows a lack of confidence in M’s mid-to-long-term prospects.
Can Demand Save the Rally?
Although M’s price has managed to defy the broader market decline, weakening liquidity flows and heavy short positioning suggest its gains may not be sustainable.
Once buyer exhaustion sets in, M risks losing its recent gains and plummeting toward $0.4105.
On the other hand, a break above $0.4736 remains likely, but only if strong demand enters the market.
Disclaimer
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