Alpaca Finance (ALPACA) has surged in the past week, recording an increase of 1,093 percent. The price rose from just over $0.04 to nearly $0.50, skyrocketing to $1.28 in a short period.
According to CoinMarketCap data, its trading volume peaked at $254.45 million and then dropped by more than 70 percent. Although the market has declined, ALPACA continues to maintain a trading position around $0.50.
Trading volume surged rapidly but then slowed down, raising concerns about a reversal as the daily RSI indicator reached 72.28 in the overbought range.
Recent candlestick chart, with a strong rejection from $1.00, indicates that sellers are in control over buyers. When investors take profits at peak prices, this chart often occurs.
The market is watching for a potential pullback after the parabolic spike.
Price action expanding on the upper Bollinger Bands indicates unsustainable market prices, which may lead traders to reduce positions and trigger a price correction.
The volume-to-market-cap ratio is 342.44 percent indicating potential instability in the system. Most trading imbalances exceeding this level rarely last unless market participants demonstrate support or new involvement.
Strong resistance barrier at $0.60, thus any unsuccessful attempts to break this price level may limit the potential for upside.
Whenever the upward momentum fades, support will be around $0.40. Long-term accumulation may be delayed due to the rising number of holders reaching 77,890 and the circulating supply nearing the maximum amount.
Conclusion
The explosive price surge of Alpaca Finance has attracted significant interest, but technical signals suggest a cooling down is possible. With major resistance being held and volume decreasing, the likelihood of a strong correction is increasing. Traders will closely monitor price movements in the coming days.