Official Trump memecoin has experienced extreme volatility over the past day. In fact, the memecoin surged 10.2% and flipped $3 resistance to a high of $3.06.
However, this pump failed to hold and the altcoin dropped again falling $2.6 before rising to $2.7 as of this writing. TRUMP pumped as investors were tricked to believe the recently launched GOLD was TRUMP 2.0.
However , after the team behind GOLD was accused of rug pull sentiment flipped shortly after. In fact, Lookonchain reported that 15 wallets that purchased GOLD sold their holdings and exited the market taking over $312k in profit.
TRUMP investors panic exit amid rising liquidation risk
This market volatility triggered a wave of liquidations for both longs and shorts. Traders who took long eyeing trend continuation, saw over $8.4 million in liquidations, while over $5.1 million worth of shorts were liquidated.
In total, the memecoin recorded over $13.57 million in total liquidations, indicating heightened volatility. Amid these liquidations, most traders both short sellers and longs, hurriedly closed their positions.
According to Coinglass data, Official Trump [TRUMP] recorded $1.44 billion in futures outflows compared to $1.38 billion in inflows. For that reason, Futures Netflow dropped 5614% to -$68 million.
A negative Netflow suggested that traders mostly closed their positions. The Open Interest further validates this observation.
TRUMP’s Open Interest dropped 6.4% to $279 million while the Derivatives Volume rose 23% to $3.3 billion. The falling OI and rising volume suggested that most traders exited their positions.
Profit taking returns on the spot too
As TRUMP crossed $3, holders on the spot also rushed to cash out after the GOLD token launch brought about a negative sentiment.
Previously, the Spot market have been aggressively accumulating, with the Netflow holding negative for five consecutive days. On 29th August, this changed so first, with the Netflow rising to positive zone.
As of this writing Netflow was around $4.5 million, suggesting more TRUMP entered exchanges, a clear sign of selling pressure.
What’s next for the memecoin?
With sellers active on both the spot and futures, the memecoin is unlikely to hold the uptrend. Historically, intense selling pressure has preceded price drops.
For now, however, TRUMP momentum still holds bullish. In fact, the Relative Strength Index (RSI) has remained elevated, currently at 73.
At these levels, the RSI suggest the uptrend is intact, with buyers still in control of the market. Likewise, TRUMP holds above both short term and long term moving averages, further validating this view.
Under these circumstances, the bullish structure is intact and likely to hold. If bulls can absorb the arising pressure, TRUMP will reclaim $3 and eye to flip $3.6 resistance.
However, if the pressure persist, the memecoin will breach $2.7 with $2.2 as the next support level.
Final Summary
- Official Trump [TRUMP] saw extreme volatility, rising 10%, rising to $3.06 then retracing to $2.7 at press time
- TRUMP saw increased liquidation, with $13 million worth of positions liquidated triggering a wave of panic selling.
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