The strong upward trend of PNUT may soon pause.

• PNUT is currently seeking a demand area to drive its forward progress.
• Technical indicators point to a slight pullback, allowing the asset to stabilize before further upside.

The meme token PNUT has been one of the best-performing assets in recent weeks, growing 1,610.05% in the past month, 561.21% in the past seven days, and 60% in the past 24 hours alone.

However, the latest analysis by AMBCrypto suggests that PNUT may enter a consolidation phase, potentially pausing its upward trend to accumulate momentum for the next stage of its rise.

PNUT shows bearish signs, forming a doji candle

As of the time of writing, PNUT is showing potential signs of a downward move on the 15-minute chart, with the formation of a bearish doji candle indicating a possible downtrend.

The bearish doji candle typically forms at local price highs, suggesting that selling pressure is increasing as market participants prepare to re-enter at lower levels. This pattern indicates that traders may be looking for opportunities to push the price down to key demand areas.

The expected decline could see PNUT fall to the demand zone between 0.7010 and 0.6499, with sufficient liquidity potentially supporting a rebound. If PNUT reaches this level, it may bounce back, with a potential upside of up to 41.19%.

Technical indicators suggest a temporary decline for PNUT

Current technical indicators suggest that PNUT is in a short-term downward trend. As of the time of writing, both the Balance of Power (BoP) and the Chaikin Money Flow (CMF) indicators are reflecting bearish signals.

The Balance of Power (BoP) indicator can help traders assess the market control between buyers and sellers, and it is currently positive but showing a downward trend.

This slight decline suggests that while bullish sentiment still exists, if the downward trend continues, the price may fall and potentially reach the previously identified demand levels.

Similarly, the Chaikin Money Flow (CMF), which measures the flow of money in and out, indicates that the inflow of funds into PNUT is decreasing. The reduction in liquidity may lead to further price pressure before a potential recovery.

Bearish sentiment among PNUT market participants is rising

Data from Coinglass shows that bearish sentiment towards PNUT is growing, with more short positions currently open than long positions.

As of the time of writing, the long-to-short ratio is 0.987, slightly favoring the shorts, although the difference in contract numbers is still small.

With most technical indicators diverging from PNUT's uptrend, signs of weakening buying pressure are becoming more apparent. The decline in demand may lead to further price declines in the short term.