Layer-1 token MemeCore (M) exploded today, defying a sluggish broader market to become the day’s top performer. The token surged nearly 30% to briefly touch a new all-time high of $1.176. However, beneath the explosive price action, key technical indicators are flashing red, suggesting the rally might be overheating and a correction could be imminent.
Key Overbought Signals Are Flashing
The most glaring warning sign comes from the Relative Strength Index (RSI) on the daily chart. The RSI is a momentum oscillator that measures the speed and change of price movements.
- Current RSI: A staggering 87.04
- What It Means: Any reading above 70 is considered overbought, indicating a asset may be due for a pullback. A reading of 87 places MemeCore deep into extreme overbought territory.
Historically, such extreme RSI levels often trigger waves of profit-taking, where traders sell to lock in gains. This selling pressure can quickly reverse a rally.
Derivatives Traders Are Betting Against It
Perhaps an even more bearish signal comes from the derivatives market. Despite the massive price increase, futures traders are overwhelmingly positioned for a drop.
- Funding Rate:Â -0.094%Â (significantly negative)
- What It Means: A negative funding rate means short traders are dominating the market and are being paid by long traders to maintain their positions. This shows a profound lack of confidence in the sustainability of the current price.
This creates a precarious situation where spot buying is driving the price up, but leveraged traders are betting it will fall.
MemeCore Price Prediction: Key Levels to Watch
The token is currently hovering above a crucial support level at $0.93. What happens next depends on whether bulls or bulls win this tug-of-war.
- Bullish Scenario: If buyers maintain control, they could push M to reclaim and break above its $1.17 all-time high.
- Bearish Scenario: If the overbought signals prove correct and selling begins, a break below $0.93 could trigger a steeper decline toward $0.74.
The Bottom Line
MemeCore’s rally is impressive but built on shaky ground. The combination of an extremely overbought RSI and overwhelmingly bearish sentiment in the derivatives market suggests this rally may be on borrowed time. For traders, this is a high-risk environment. While momentum could always carry the price higher, the risk of a sharp, sudden correction is significant.
