FARTCOIN drops 21% – Why price recovery hinges on THIS demand zone

Key takeaways

FARTCOIN recorded a $91 million in outflows from the spot and derivatives markets recently, as the asset plunged sharply. Liquidity appears to be diverging from FARTCOIN into PUMP, as suggested by chart patterns, with demand halting that shift.

Fartcoin [FARTCOIN] declined by 21%, at press time, in the past 24 hours, as investor sentiment tilts bearish.

According to CoinMarketCap’s Community Sentiment data, the share of investors bullish on the asset dropped to 62.5%, down from a 70% peak on the 6th of August, among 13.70 million participants.

Analysis shows that outflows across market segments have aligned with the decline, with investor interest shifting to other memecoins—yet a potential rebound may still be in play.

FARTCOIN suffers liquidity outflow

There has been a massive liquidity drain across the derivatives market on FARTCOIN contracts. According to CoinGlass, Open Interest (OI) dropped over 12% to $743 million, reflecting an $89 million net outflow.

OI measures the total dollar value of both bullish and bearish contracts active in the market at press time.

Source: CoinGlass

A decline in OI alongside price signals waning investor sentiment in the derivatives market, as some traders close their positions voluntarily while others face liquidations.

At the time of writing, $10.55 million worth of positions had been liquidated, suggesting the bulk of the outflow came from investors who exited voluntarily.

This sentiment extends to the spot market, where roughly $3.5 million in positions were closed in favor of other tokens.

Source: CoinGlass

Is PUMP pulling liquidity away?

AMBCrypto observed a notable pattern between FARTCOIN and Pump.fun [PUMP], hinting that liquidity may be flowing into PUMP.

Typically, both assets have mirrored each other’s movements over the past week. However, in recent days, while FARTCOIN (marked blue) declined, PUMP (marked purple) rallied, signaling possible inflows into the latter.

This suggests investors could be reallocating liquidity from FARTCOIN into PUMP. However, this has not yet been confirmed on-chain—only chart patterns point to the possibility.

Source: TradingView

FARTCOIN’s chart indicates the asset could still overturn its bearish trend based on recent developments.

Is a FARTCOIN bullish scenario still possible?

The 1-day chart for FARTCOIN shows it has entered a key demand zone between $0.8070 and $0.9063.

This level has historically acted as a price catalyst on four different occasions, each leading to notable gains.

A repeat of this pattern could trigger a strong rally in the coming days.

Source: TradingView

However, a bullish rebound is unlikely if the price breaks below the demand boundary at $0.8070.

Additionally, demand at this zone appears to be weakening. The last time FARTCOIN traded here on the 2nd of August , the asset posted its smallest gains since first entering the level, suggesting most buy orders have already been filled.

Weakening technical indicators

Analysis of the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) does not currently support a bullish outlook.

At press time, both indicators were in bearish territory, implying continued downside pressure that could limit rebound potential.

Source: TradingView

The RSI sat at 36.31. A move back toward the neutral 50 level, or a dip below 30 into oversold territory, could signal a potential recovery.

Meanwhile, the MACD was at -0.0805. A crossover into positive territory would strengthen the case for a bullish reversal.