Fartcoin [FARTCOIN] is breaking out of a potential bullish continuation pattern. The memecoin is up more than 2.51% in the past 24 hours but down more than 51% year-to-date (YTD).
The drawdown indicates that the memecoin remains largely undervalued compared to its peak price level of $2.61. Is this drawdown the reason as to why whales are accumulating the token with leverage?
FARTCOIN: Leverage still leans on bears
Recently, a mysterious whale has been stacking long positions for FARTCOIN on Hyperliquid. According to Lookonchain data, the trader opened a 2x long order for 16.73 million FARTCOIN tokens, worth over $2.16 million.
On top of that, the trader added a limit order to buy 18.04 million FARTCOIN at a cost of $531K. The total buy order, if filled, would amount to more than $2.69 million.
Meanwhile, the open position was sitting at an unrealized profit of more than $17.33K.
The buy limit order hinted that the whale was expecting another price drop to fill this trade.
In fact, overall cumulative liquidation leverage was leaning on the bears’ side, as per CoinGlass. The total long leverage was $6.41 million between $0.118 and $0.125, while shorts between $0.132 and $0.145 were $6.91 million.
The total leverage was seller-biased, but the Long/Short Ratio was bullish. The metric rose from 0.9507 on the first day of August to 1.1154 by the second day.
The data suggested that traders’ bias was shifting as August progressed. In 2024, a bullish crypto market began in August and lasted until the end of that year. Will FARTCOIN see a bullish reversal this month?
Is the breakout sustainable?
Following FARTCOIN’s bullish rally in June, which peaked at around $0.175, it entered a correction phase. The pullback traded the whole of July in a falling wedge pattern that has since been breached.
Currently, the memecoin trades above the slanting resistance of the wedge pattern after a retest of the breakout at $0.1250. The MACD has also flipped bullish, with the RSI Divergence indicator reinforcing this signal.
The RSI Divergence has flicked bullish three times in two weeks, confirming the weight of the signal. Its reading is above the neutral line, at 59.83.
However, the memecoin is facing resistance as it approaches a local supply zone at $0.1350. Other minor resistances sit at $0.1400 and $0.1550 before reaching the top of the wedge.
Final Summary
- FARTCOIN whales show signs of returning as a mysterious trader goes long with a 2x leveraged position worth $2.16 million.
- FARTCOIN broke above a falling wedge pattern, confirmed with a retest, but it is facing resistance at $0.1350.