Popcat and Dogs are the two top-gaining tokens in the 100 largest cryptocurrencies by market cap as Bitcoin price climbs back above $56,000.

The meme coins Popcat (POPCAT) and Dogs (DOGS) traded at $0.62 and $0.0011, with 19% and 16% in 24-hour gains respectively at the time of writing. Upside momentum meanwhile had pushed Bitcoin (BTC) price above $56,500 as bulls fought to recover from the dip that saw the leading digital asset trade near $53,300 on Sept. 7.

Futures listing helps POPCAT, DOGS higher

Most meme coins have struggled for upward momentum in recent weeks, mainly as the broader market experienced downward pressure throughout August.

However, like many other small cap tokens, Solana(SOL)-based Popcat and Telegram-related Dogs have benefited from a rush of positive sentiment following crucial futures trading support across major exchanges..

Binance recently added POPCAT perpetual contracts, allowing traders to bet on the meme coin’s price. This move caused Popcat’s price to spike significantly. OKX also added POPCAT futures and outlined a trading contest that offers up to $100 in rewards.

DOGS, which slipped amid the recent arrest of Telegram CEO Pavel Durov, has recovered some of the losses since falling to $0.0009 on Sept. 8. Previously, the Telegram-native meme coin had rallied thanks to Binance’s offering of 40 million DOGS in a contest that ends on Sept. 17.

Binance, OKX, and Bybit are some of the top exchanges supporting the DOGS airdrop and token listing.

Bitcoin recovers above $56k

Bitcoin’s recovery to above $56,500 comes amid a bounce in the Coinbase Premium Index, a metric indicating increased whale and institutional accumulation of BTC.

A rebound in U.S. demand may help bulls reposition for a stronger end to the fourth quarter. Analysts at CryptoQuant see the continued accumulation by long-term holders as key to a potential price bounce.

Bernstein analysts issued a note on Sept. 9 predicting a surge to $80k-$90k for BTC if Donald Trump wins the U.S. presidential election.

However, they suggested that a win for Kamala Harris could trigger downside action, potentially pushing BTC to lows of $30,000. The contrast is rooted in the crypto industry’s perception of Trump as more crypto-friendly compared to Harris.

Cardano dropped 57% when the Federal Reserve cut rates back in 2019. With another rate cut on the horizon, the cryptocurrency faces a similar setup that could bring major downside.

Cardano prepares for September decline

In May 2019, the Federal Reserve initiated its first rate cut, lowering rates from 2.42% to 2.39%. Rates at that time were much lower than today, and the public debt stood at $22 trillion. Today, debt has increased to nearly $35 trillion, and interest rates now stand at 5.33%, more than double the 2019 levels.

When the rates started to fall in 2019, Cardano experienced a sudden drop. After a brief period of recovery, the downtrend continued for months until early 2020. An uptrend emerged later, but the market downturn during the COVID-19 pandemic coincided with further rate cuts. Despite uncertainties around the exact link between rate cuts and crypto declines, Cardano and the broader market saw a clear decrease in value.

A similar scenario could unfold today. Crypto has shown correlations with traditional finance in the past, including during the 2019 rate cut. The Federal Reserve’s upcoming meeting is likely to result in a rate cut based on CME data. If the market follows the 2019 pattern, Cardano could face a multi-month decline, which could last until the end of the year, before recovering in early 2025. A repeat of the previous trend could push Cardano’s price down to around $0.15.

Additionally, September has often proven to be a tough month for both stocks and crypto. In September 2020, during a halving year, Cardano also faced a downtrend. Coupled with the current 10% drop since the start of this month, these factors could drive Cardano toward a deeper fall in the weeks and months ahead below its 2022 support line at $0.2349.

Cardano’s bearish momentum grows with SRSI, MACD, and VRVP

Many traders focus on short-term movements, but stepping back for a longer-term view can give a better sense of the bigger picture. Cardano’s monthly Stochastic RSI (SRSI) and MACD are flashing warning signs that shouldn’t be ignored, and both are painting a rough picture for ADA.

The SRSI tracks momentum by looking at an asset’s price range over time. The scale goes from 0 to 100, with anything below 20 showing oversold conditions. Since March 2024, the SRSI has been sliding, and it’s now closing in on that oversold region.

The MACD, meanwhile, is showing similar bearish vibes. On the monthly chart, the MACD line has already crossed below the signal line, which is a sign of downward pressure. The histogram, which shows the gap between the two lines, is about to flip red, also pointing to a growing bearish momentum.

Alongside the bearish signals from the Stochastic RSI and MACD, the Visible Range Volume Profile (VRVP) adds even more negative pressure to the outlook. The VRVP shows where most trading volumes occurred at various price levels. In Cardano’s case, the volume bars within the current price range are quite thin, which indicates weak support. The biggest volume bar begins at the $0.15 level, suggesting a strong support zone there. Below the current price, there’s a gap in the volume profile, which means if Cardano continues to fall, there’s little trading activity to slow down the drop until it reaches that $0.15 zone.

Is Cardano’s 2022 support line strong enough to hold?

Despite the bearish indicators, a couple of factors could prevent Cardano from dropping sharply. At the moment, the price sits within a macro Fibonacci golden pocket, drawn from the all-time low to the recent high in March 2024. This zone, between $0.2951 and $0.3204, has acted as support for now. However, when looking at other Fibonacci retracements from different points, ADA has already fallen below the 78.6% retracement on every one of them. This could raise doubts about the strength of the current golden pocket, as there’s a possibility it may not hold up in the long term.

A stronger support level, however, lies at $0.2349, a line that was respected during the 2022 bear market. But, with ADA currently around $0.315, a drop to that support would still represent a 25% decline, which would be far from ideal. 

Strategic considerations

In our view, there could be a dead cat bounce before the September 18 Fed meeting. However, after that, ADA is likely to face a 2-3 month downtrend until the Fed slows the pace of its rate cuts. A more cautious strategy would be to wait for ADA to drop below the $0.2951 golden pocket before shorting. This offers a safer entry point compared to shorting immediately right now, as Cardano could see a short-term uptrend while holding above the golden pocket. If the price falls below this level, shorting down to $0.2349 becomes a more calculated move.

In just 10 days, POPCAT has dropped over 30%, but the decline may not be over. A deeper analysis of multiple indicators reveals that further declines could be on the horizon.

Inside POPCAT’s parallel channel

POPCAT respects a parallel channel that defines its movement. While there have been moments when the price broke above or below the channel, it continues to adhere to this pattern over time. The white lines on the chart offer a simplified representation of the price movements within the channel.

Looking ahead, the yellow lines depict a possible future path for POPCAT. The next move could see a drop to around $0.43 in the coming weeks, representing a further decline of over 23% from the current level. After this, the price may then rally towards $0.87 around October to November.

Gartley harmonic pattern on the verge of completion

One strong indication that supports the likelihood of a further downturn in POPCAT is the development of the Gartley harmonic pattern on its daily chart. The Gartley pattern is a type of harmonic price formation that signals potential reversal zones based on Fibonacci ratios and has an 85% success rate. It consists of five points—X, A, B, C, and D—and represents a retracement followed by a continuation of the overall trend.

In the case of POPCAT, the pattern has formed with the final point D yet to be completed. If the Gartley pattern completes as expected, the price could drop to approximately $0.38. This target lies slightly below the lower boundary of the established parallel channel.

MACD Reversal

Another factor pointing toward a potential continued decline in POPCAT is the recent bearish crossover in the Moving Average Convergence Divergence (MACD) indicator. The MACD is a momentum indicator that consists of two lines: the MACD line and the signal line. It shows the strength and direction of a trend by analyzing the relationship between these two lines.

A crossover occurs when the MACD line crosses below the signal line, which is seen as a bearish signal, similar to a “death cross” in moving averages. The crossover means that the momentum has shifted from bullish to bearish.

Counterpoints: Limited downturn possibility

While several factors suggest a continued downturn for POPCAT, there are also indicators that could limit or even conclude the current decline.

First, there is a confluence of multiple Fibonacci golden pockets in the $0.53 to $0.593 range. These include the Fibonacci retracement from the low on August 19 to the high on August 25, the high on July 1 to the low on August 5, and the low on July 5 to the high on July 21. Additionally, the 50% retracement levels from other Fibonaccis also converge within this price zone, which strengthens the support in this area. Until POPCAT drops below $0.53, the downward movement will likely not continue. On the other hand, if it fails to break above $0.593, we also cannot confirm that the decline has ended.

Adding to this, the historical volatility range for POPCAT between $0.50 and $0.55 has been quite an important zone, acting as support or resistance on 38 different occasions. The area closely aligns with the golden pocket confluence, which further reinforces the significance of this zone as a potential floor for the current downtrend.

Lastly, the Visible Range Volume Profile (VRVP) adds another layer of support in the $0.55 to $0.593 area. The VRVP is a tool that displays trading activity at various price levels and highlights areas with high trading volumes as major zones of support or resistance. In this case, the volume bar in the $0.55 to $0.593 range is the biggest and suggests strong buyer interest. However, if POPCAT drops below $0.40, the volume profile thins out considerably, indicating little to no support below that level, which could lead to even steeper declines if breached.

Strategic considerations

At the current price level, POPCAT presents a conundrum. On the one hand, several indicators suggest further downturns, while on the other, key support levels hint that the bearish phase may have already run its course, with bullish momentum potentially on the horizon.

In our analysis, which aligns with insights shared in previous articles, the upcoming monetary policy shift—specifically the anticipated rate cuts in September—combined with the historically weak performance of cryptocurrencies in September could render these support zones for POPCAT obsolete. Given this outlook, the strategic approach would involve shorting POPCAT down to the $0.43 level.