Donald Trump, the newly elected President, has introduced a fresh digital currency known as OFFICIAL TRUMP (TRUMP). This Solana-backed meme coin has experienced a remarkable surge, soaring by more than 180% and is currently trading at $18.61, according to current market data.
On the other hand, there appear to be several bearish divergences on its hourly chart, suggesting a possible change in direction.
TRUMP’s Negative Divergence Threatens Rally
The new meme coin based on Trump, called TRUMP, has been the biggest winner in the market over the last 24 hours. Its rapid increase caused its total value to exceed $3 billion within just 12 hours, placing it among the top 100 cryptocurrencies. At this moment, the token associated with Donald Trump ranks as the 37th largest crypto asset by market capitalization.
Despite all the excitement about TRUMP right now, some signs are pointing towards a potential downturn. A closer look at TRUMP’s hourly chart by BeInCrypto suggests that its trading activity has been steadily decreasing.
As a keen observer of market trends, I note that a negative divergence occurs when I witness an increase in an asset’s price without a proportional rise in trading volume. This discrepancy hints at waning demand or diminishing interest from buyers, suggesting that the current price rally might not be sustainable in the long run.
This pattern indicates that the increase in TRUMP’s price might mainly stem from reduced trading volume or speculative behavior. As a result, the meme coin could face a possible price drop.
Adding to the bearish perspective, Trump’s Chaikin Money Flow (CMF) has been on a consistent decline. Despite Trump’s price increase, its CMF trend continues downward, creating a bearish divergence – a pattern that often suggests a potential reversal in the positive trend.
As an analyst, when I observe that an asset’s price is surging while its Chaikin Money Flow (CMF) is dwindling, it signifies a decrease in buying pressure, even amid the price rise. This discrepancy suggests that the rally might not have robust market backing, potentially hinting at an impending reversal in trend.
TRUMP Price Prediction: Uptrend Faces Risk of Reversal
As the demand for TRUMP decreases, its upward trajectory may slow down. If selling becomes more prevalent, it might change direction and potentially drop to around $14.85.
Should the ongoing trajectory persist, I anticipate that TRUMP could reach and surpass its previous peak of $19.39, potentially paving the way for even higher records in the future.
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2025-01-18 22:31