CoinDesk Report:
The price movements can be attributed to various factors including panic selling and declining trader interest. Notcoin (NOT), not oversold, may soon see a recovery towards $0.012, despite its recent downturn.
Notcoin (NOT) is a token tied to a Telegram-based gaming and earning project, which has seen its darkest day since its launch on July 4. On that date, NOT traded as low as $0.011 in early morning trading.
However, over the past 24 hours, the price unexpectedly plummeted by 18.38%, leading to a decline in trading interest. As of the time of publication, Notcoin has changed hands at $0.098.
This marks the lowest price since its launch and airdrop in its first week.
Several factors contributed to Notcoin’s sharp decline. One notable factor is Bitcoin; in recent days, the now-defunct Bitcoin exchange Mt.Gox has been planning to distribute Bitcoin to creditors, having retrieved billions from cold storage starting July 4.
This development has caused market panic as many cryptocurrency holders opted to liquidate some of their assets, including Notcoin.
This downturn contrasts starkly with the project’s robust adoption on Telegram. However, the decline in NOT’s price has not concluded in the spot market.
Activity in the derivatives market has also played a crucial role, according to findings from AMBCrypto. A key indicator that kept Notcoin’s price elevated was the open interest (OI).
As of the time of writing, Notcoin’s total OI has dropped below $100 million. OI measures the value of outstanding contracts in the market.
An increase indicates traders are adding liquidity to the market. However, like with NOT, a decrease suggests an increase in closing positions as traders appear to be reallocating funds.
If this trend continues, Notcoin may struggle to recover from its recent losses. Another significant driver of the plummet in NOT’s price has been social volume.
Social Volume tracks mentions of a cryptocurrency in textual documents or searches. Typically, an increase in this number leads to higher asset prices. However, social volume has reached extremely low levels as of the time of publication.
Therefore, demand for NOT has not matched the selling pressure it has experienced, ultimately leading to a price decline.
On-chain indicators
From a technical standpoint, AMBCrypto examined the NOT/USD 4-hour chart. Based on our analysis, the Accumulation/Distribution (A/D) line has declined to 10.38 million since July 2.
This indicates that many cryptocurrency holders have been selling the token. Observing the Bollinger Bands (BB), widening bands suggest increasing volatility.
Currently, the lower range of the BB touched $0.093 for Notcoin, indicating overselling of the token. If buying pressure emerges at this point, NOT could begin to approach $0.012.
However, if the market remains in panic, such forecasts may not materialize. Instead, Notcoin could drop to $0.086.