Despite meme coins dominating the charts in October, the beginning of November has been marked by turbulence. They faced the initial impact of reducing risks ahead of a tumultuous U.S election week, resulting in FLOKI plummeting by 20% and wiping out all gains from October.
So, the question arises: How deep could the decline extend before there is a potential attempt at recovery?
Analysis of FLOKI’s Price Decline
We have utilized a Fibonacci retracement tool (colored in yellow) to outline the range between the highs of July and the lows of August. Throughout October, the 78.6% Fib level ($0.00012) has served as a crucial short-term support. Subsequently, the following immediate support was the low of April, which halted the significant sell-off that occurred in August.
These two support levels may act as barriers to prevent further decline in FLOKI, particularly if Bitcoin [BTC] reverses its recent downward trend post U.S elections.
Nevertheless, in the event of a widespread market downturn post elections and in case FLOKI fails to maintain the aforementioned support levels, attention may turn to the August low and $0.00069 as key levels of interest.
The relatively low RSI reading indicates that the market remains predominantly bearish, and the sluggish OBV (on-balance volume) reinforces the lack of substantial spot demand for FLOKI over the past few weeks.
Indicators Point to Consistent Accumulation
On-chain metrics suggest a steady pattern of accumulation, hinting at a possible uptrend in the future. Currently, market sentiment appears neutral, suggesting that FLOKI’s prices could move in either direction.
However, the increase in daily active addresses indicates a renewed market interest following a recent dip prior to the election. This surge in demand could potentially spark a reversal above the support levels highlighted on the price charts.
This positive outlook is further reinforced by the consistent and gradual rise in the accumulation of FLOKI tokens, as evidenced by the steady increase in supply held outside of exchanges since mid-October.
One critical factor is the diminishing selling pressure on exchanges, despite the recent 20% decline. The supply available on exchanges has been decreasing since late September, indicating a limited availability of FLOKI for sale on centralized platforms.
With the diminishing supply pressure, FLOKI may have the necessary space for a recovery. However, the market sentiment in the short term and the response of investors to FLOKI will heavily depend on the outcome of the U.S election.