Simon’s Cat Crypto Soars 12% in a Day: What’s Driving It?

• Simon’s cat crypto demonstrates a robust bullish momentum along with significant trading volume
• The divergence exhibited by the meme coin as it neared the two-month range high may lead to a potential pullback

Simon’s Cat [CAT] experienced a remarkable surge this week. The meme coin had been fluctuating within a range since mid-September. On October 21st, it surged from the lower end of this range following Binance’s announcement of the token’s listing on its derivatives marketplace.

At the time of writing, CAT was trading just 6.4% below its range highs. However, there was a notable divergence between the price action and the momentum indicators. Is Simon’s cat crypto on the verge of a significant retracement?

Signs of Overextending

Source: CAT/USDT on TradingView

The range formation (in purple) spanned from $0.0000236 to $0.0000466, with the midpoint at $0.000035, serving as critical support and resistance over the last two months.

The Money Flow Index, often seen as a volume-weighted version of the RSI, combines trading volume with price movement. This oscillator has shown lower highs over the past two days while the price has continued to surge.

This presents a bearish divergence, indicating that a pullback may occur soon. Given the proximity to the range highs, a rejection at the $0.0000466 level seems probable.

Support levels at $0.000038 and $0.000035 may present good buying opportunities in the event of such a rejection.

Trends in Open Interest and Funding Rates

Source: Coinalyze

Since Monday, Simon’s cat crypto nearly doubled in price, while Open Interest saw a monumental rise of approximately 500%. It increased from $6.7 million on the 21st to $36 million at the time of writing.

Read Simon’s Cat’s [CAT] Price Prediction 2024-25

Nonetheless, the funding rate has cooled over the last 48 hours, indicating a diminishment of the bullish sentiment seen earlier in the week.

Overall, while sentiment remains bullish, a pullback towards the mid-range level appears likely.

Disclaimer: The information provided is for informational purposes only and should not be considered financial advice. It reflects solely the writer’s perspective.