Peanut the Squirrel (PNUT) Could Be Preparing for a Bounce, Analysis Suggests

The meme coin that recently surpassed a $2 billion market cap has experienced a sharp 30% price drop in the past week

Peanut the Squirrel (PNUT), a meme coin that recently crossed the $2 billion mark in market cap, has seen a steep 30% price drop over the last week, bringing its price down to $1.36. But emerging signals are hinting at a possible PNUT recovery on the horizon.

While some traders may be holding out for further discounts, this analysis suggests that the window of opportunity to buy at these lower levels may be closing soon.

Bearish Sentiment Around Peanut the Squirrel Could Fuel Bounce

One crucial indicator that suggests a possible PNUT recovery is the Weighted Sentiment, which assesses market perception using social volume. A positive sentiment usually reflects bullish market commentary, which tends to drive up demand and price. On the other hand, a negative sentiment signals bearish sentiment across the market.

However, extreme readings in Weighted Sentiment can trigger contrarian moves. For example, overly bullish sentiment may precede a price correction, while extreme negativity often sets the stage for a rebound.

According to Santiment data, PNUT’s Weighted Sentiment has dropped to a record low of 0.12. This deep bearish sentiment reflects market pessimism, but its extremity could fuel what is known as a “hated rally,” where overwhelming negativity sparks an unexpected recovery.

Moreover, the Relative Strength Index (RSI) is another indicator that suggests the Solana meme coin’s price may recover some of its losses. RSI is a technical oscillator that uses the speed and magnitude of price changes to gauge momentum, where a decreasing reading reflects bearish momentum and an increasing reading reflects bullish momentum.

On the 1-hour chart, the indicator is below the 50.00 line, but the rating has gone up since yesterday. If this rating continues to surge, then we may see PNUT’s price rise higher than $1.36.

PNUT Price Prediction: Rally Toward $1.94 Begins

Observing the 1-hour timeframe, BeInCrypto also noticed that trading volume around PNUT has increased. However, it is worth noting that both buyers and sellers are still transacting the token.

Still, it seems that the bulls are defending the price at $1.31. If this continues successfully, then we may see PNUT’s price rally toward $1.64 in the short term. In a highly bullish scenario, the PNUT recovery could see the price climb to $1.94.

On the other hand, if the selling pressure increases, this may not happen. Instead, we could see the meme coin’s price drop to $1.26 in the short term.