Key Takeaways
SPX6900 rallied 12.13% to a new all-time high of $2.27 before slightly retracing to $2.22 by press time. SPX profit takers, however, threaten the rally with Netflow surging to $1 million.
After breaking $2.05 resistance, SPX6900 [SPX] rallied 12.13% to a new all-time high of $2.27 before slightly retracing to $2.22 by press time.
At the same time, its market cap reached a new high of $2.1 billion, while trading volume jumped 134% to $119 million. Such a spike in market cap and trading volume indicates an increase in capital inflow.
But is this the start of a long bull run?
Demand for SPX6900 Futures skyrockets
Interestingly, as SPX tested the $2.1 resistance, investors rushed into the Futures market to position themselves, awaiting the next move.
According to CoinGlass, Open Interest surged 17.97% reaching $276 million, while derivatives volume jumped 92% to $412 million.
Source: CoinGlass
When Volume and OI surge alongside each other, it signals growing participation in the Futures market and increased capital influx.
Importantly, these investors were particularly interested in long positions. This is evidenced by the fact that the SPX6900 Funding Rate has held within the positive region over the past week.
Source: Coinalyze
As of this writing, the Funding Rate was around 0.022, with a predicted Funding Rate of around 0.041.
Typically, a positive Funding Rate reflects a high demand for longs compared to shorts — a scenario that’s further evidenced by a favorable Long/Short Ratio.
At press time, this metric stood at around 1.08 as per CoinGlass, indicating that most investors are actively betting on prices to continue rising.
Profit takers flood the market
As expected, after SPX6900 rallied to a new high, investors took the opportunity to cash out. According to CoinGlass, the altcoin recorded two consecutive days of positive netflows.
Source: CoinGlass
At press time, Spot Netflow was $1.0 million, an increase from $426k the previous day, a clear sign of aggressive profit-taking.
As a result, SFR declined from 7,200 to 77, reflecting a decline in scarcity and an increase in supply, according to Santiment.
Source: Santiment
Typically, when scarcity decreases, it implies that more tokens are available for immediate sale on Exchanges. Historically, increased supply has preceded lower prices amid rising downward pressure.
Can the memecoin sustain recent gains?
According to AMBCrypto’s analysis, SPX6900 rallied to a new ATH as investors pumped capital into the Futures market.
For that reason, the memecoin, Relative Strength Index (RSI), made a bullish crossover, surging from 64 to 71. Likewise, Chaikin Money Flow remained strongly positive, settling at 0.13 at press time.
Source: TradingView
When these two rise in tandem, they signal increased demand, with the market primarily dominated by buyers.
Therefore, if the demand witnessed over the past day persists, the SPX could sustain the uptrend and make further gains. Under such circumstances, SPX is expected to target a new all-time high of $2.5.
However, if profit takers take hold and overpower buyers, SPX6900 will retrace and drop to $1.93.
