Meme coins built on Solana have attracted a lot of attention throughout the year. Recently, these tokens had taken a backseat — until today, when Popcat (POPCAT) reentered the top 100 by market capitalization.
POPCAT, a cat-themed meme coin, surged to $0.60 during early trading on Wednesday. Although the price has since pulled back to $0.56, this on-chain analysis examines what could be next for the cryptocurrency.
Popcat Surges Again, but the Road Is Not Yet Free
n July, POPCAT’s price reached $0.99, nearly hitting the significant milestone of a $1 billion market cap. For context, the market cap is calculated by multiplying the price by the circulating supply. For a cryptocurrency with a fixed supply, any price increase directly boosts the market cap.
That was the case when the meme coin reached its all-time high mentioned earlier. This time is no different, as the recent 10% price increase pushed the market cap to $585 million.
Read more: 11 Top Solana Meme Coins to Watch in August 2024
While the market cap has decreased again, the token’s return to the top 100 cryptocurrencies could reignite interest in Solana meme coins.
However, this resurgence may face challenges due to Open Interest (OI). Open Interest represents the total number of outstanding contracts in the market. An increase in OI indicates that traders are expanding their positions, and more capital is being committed to cryptocurrency-related contracts.
On the other hand, a decrease in OI suggests that existing positions are being closed, leading to a drop in liquidity. For POPCAT, OI had earlier increased, surpassing $30 million, but as of now, it has fallen to $27.80 million.
Historical analysis shows that an increase in POPCAT’s Open Interest has been vital to the increase in the price of meme coin. Thus, if the value continues to drop, the token may find it challenging to resume its uptrend.
POPCAT Price Prediction: The Cat Eyes $0.70
According to the daily chart, the Parabolic SAR indicates that POPCAT might be in an ideal entry position. The Parabolic Stop and Reverse (SAR) indicator measures trend direction and can identify potential reversals.
When the dotted lines are above the price, it suggests a potential selling opportunity. Conversely, when the lines are below the price, it signals a buy opportunity, which is currently the case with POPCAT.
However, for the bullish outlook to be confirmed, the Relative Strength Index (RSI) needs to cross above the neutral line. At press time, the RSI, which measures momentum, is near the 50.00 midpoint but remains slightly below it.
Read more: What Are Meme Coins?
If the RSI crosses above the neutral line, POPCAT’s price could resume its upward trend, potentially rising to $0.70. However, if Open Interest continues to decline, the token might struggle to reach that level. In that case, the price could drop to $0.51 or even as low as $0.40.
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