Cash Cat [CASHCAT] fell 16% in one day, marking one of the memecoin's steepest daily declines. The sharp drop has created significant pressure on leveraged traders, though certain on-chain metrics suggest underlying support remains present.
Liquidation Imbalance Punishes Leveraged Longs
The perpetual market recorded a severe liquidation imbalance over the past 24 hours. Long traders lost 14.8 times more than short traders, with long liquidations reaching $566,300 compared to $38,210 in short liquidations. This disparity indicates that leveraged bulls were caught on the wrong side of the price decline, with forced selling potentially deepening downside pressure if the pattern continues.
A similar liquidation dynamic emerged on September 4, when long liquidations reached approximately $480,000 against $28,000 in short liquidations, suggesting that repeated forced selling by leveraged traders may intensify price pressure.
Spot Market Selling Pressure Persists
Spot traders have contributed significantly to the decline. Over the past 24 hours, spot market netflow remained positive at approximately $96,500, driven by inflows exceeding $3.19 million. A positive netflow indicates more CASHCAT is moving onto exchanges, typically increasing selling pressure. Over the past seven days, netflow reached $1.3 million, reflecting sustained inflow activity that could prolong downward pressure in the near term.
Mixed Signals on Trader Sentiment
The long/short ratio in the perpetual market presents a more nuanced picture. Long positions accounted for 50.47% of trading volume over the past 24 hours, indicating continued dominance by bulls. The funding rate has remained positive and climbed to 0.0174% despite heavy long liquidations, suggesting traders still expect the asset to trend higher.
However, this optimism carries risk. If spot market selling pressure accelerates and bearish momentum builds, additional liquidations could follow, working further against long traders who remain exposed.
