At the current moment, FLOKI [FLOKI] has fallen victim to negative trends prevailing in the cryptocurrency market, with the memecoin trading at $0.000227, following a decline of 4.8% in the past 24 hours.
Over the span of the last week, FLOKI has experienced a 9% decrease due to heightened selling activity.
There are indications that the memecoin might plunge further, as a rounded top formation has emerged on its four-hour chart. This pattern signals a diminished bullish momentum alongside an increase in selling pressure.
The Relative Strength Index (RSI) has notably depicted a surge in selling pressure following a gradual decline, with the RSI currently standing at 38, suggesting an imminent oversold condition for the memecoin.
In addition, the Awesome Oscillator (AO) has showcased the dominance of the bears, with red AO bars in a negative state and growing in size, indicating a strengthening downward trend.
If these bearish indicators persist, there is a likelihood that FLOKI may seek support at the 1.618 Fibonacci level of $0.00017. A drop below this level would confirm the rounded top pattern, potentially accelerating further declines.
To initiate a bullish breakout against this negative trend, FLOKI would need to surpass the resistance at $0.00024. Such an upward trajectory, coupled with substantial trading volumes, could pave the way for more positive movements.
Conflicting Signals from On-chain Data
On-chain data from IntoTheBlock has pointed towards mixed signals concerning FLOKI. The network growth has witnessed a decline, indicating reduced engagement with the token.
A decrease in addresses that are in profit serves as another bearish signal, suggesting an overall pessimistic market sentiment.
Nevertheless, a slight uptick in whale activity could be viewed as a positive sign, especially if these significant addresses are making purchases.
Over the past two days, the number of transactions exceeding $100,000 within FLOKI has gradually soared, reaching 241 billion, marking a remarkable 173% surge in just 24 hours.
Examining FLOKI’s Derivatives Data
Derivatives market data has also hinted at a negative outlook among speculative traders. Volumes in this market dropped by 3% within a day, while Open Interest (OI) plummeted by 11% to $29M.
This decline indicates a trend of traders closing their positions on FLOKI.
Furthermore, the Long/Short Ratio has declined to 0.85, indicating a slightly higher presence of leveraged short positions compared to long positions.
Potential surge in long liquidations could have influenced the demand for short positions in this scenario.