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Fartcoin: After a 17% surge, can it sustain the rally, and if so, for how long?
After posting a remarkable 17% gain in recent trading sessions, Fartcoin has garnered attention from market participants. With this momentum, it is essential to examine whether such a significant rally can be sustained, as well as explore potential durations.
New user acquisitions and spot traders drive purchases
Data from Nansen reveals that more users have allocated funds to Fartcoin, with a staggering 451 new additions within the timeframe, increasing the total number of users holding the asset to over 89,000. This influx in demand has led to a substantial surge in buying volume, which is now at $6.988 billion and 16.15% growth.
Fartcoin’s value has been driven by both spot traders and new user acquisitions, accounting for $2.95 million in purchases within the past day alone.
Derivative market sentiments
An examination of the derivative market reveals a contradictory situation, however. Although this may not be entirely unexpected considering the unpredictability of the cryptocurrency market, it could impact Fartcoin’s future movement.
The Funding Rate, which determines if traders are paying a premium for holding their long positions or short selling, indicates that bulls are paying this premium as it reads 0.0453%. This metric has remained positive since April 26th and continues to rise, signaling an intense bullish sentiment within the market.
On the other hand, there exists a discrepancy in terms of Open Interest (OI), which represents the total outstanding derivative contracts. It rose by 11.23% to $617.94 million, largely driven by long traders dominating this arena.
However, it is essential to note that OI Weighted Funding Rate has dramatically decreased, falling from an elevated level of 0.1185% to a much lower value of 0.0067%. Although the decline remains within a positive range and does not indicate a bearish shift, it suggests a reduction in buying volume.
In light of this data, we can infer that while Fartcoin has displayed impressive gains and growing interest, the declining buying volume in the derivative market may pose some uncertainty going forward.
Source: https://ambcrypto.com/fartcoin-after-a-17-surge-can-it-sustain-the-rally-and-if-so-for-how-long/
