Seeing a recovery from recent bearish trends, Floki [FLOKI] has experienced a 9% increase in the last 24 hours, currently trading at $0.000188. This resurgence aligns with a larger market recovery, pushing the total crypto market capitalization up by 3.6% to exceed $3.4 trillion.
Despite these recent gains, FLOKI remains down by 21% over the past week. While short-term momentum shows a positive outlook, the long-term trend remains negative according to the one-day chart.
Understanding the Double-Top Pattern in FLOKI
Recently, FLOKI confirmed a double-top pattern after breaking below the $0.000207 neckline earlier in the week. Nevertheless, the bearish outlook has weakened following the recent uptick.
If FLOKI sustains its upward momentum, there’s a high probability it will retest the neckline from below. Failure to break out could trigger a return to the downtrend, potentially dropping to $0.000124. Conversely, a successful breach of resistance could challenge the bearish sentiment, opening doors for further gains.
Aside from the key resistance level at the neckline, attention should also be on the 200-day Simple Moving Average (SMA) support at $0.000166.
Since mid-November, FLOKI has maintained trading above the 200-day SMA. Historically, this level has often posed a robust resistance. A dip below $0.000166 might signal negative market sentiment.
Crucial Insights from the Key Demand Zone
Traders actively acquired FLOKI between $0.000166 and $0.000172, with data from IntoTheBlock indicating that 137 billion FLOKI tokens were bought by 1,420 addresses within this range.
Given the buying pressure within this zone, coupled with proximity to the 200-day SMA, traders may bolster their holdings in defense. This collective action could maintain FLOKI above $0.000166, attracting fresh demand from potential investors eyeing profitable entry points.
Conversely, a breach below this crucial demand zone might trigger panic selling as holders opt to limit their losses.
Interpreting the Falling Open Interest Significance
In typical scenarios, Open Interest (OI) surges alongside price gains. However, for FLOKI, despite the recent 24-hour increase, OI recorded a 10% drop to $18M at the time of reporting.
Furthermore, the declining OI coincided with minimal liquidations totaling $255,000, indicating that the drop wasn’t influenced by mandatory position closures.
This decline could indicate wavering confidence in FLOKI’s rally. Therefore, sustained low market participation might challenge the durability of the ongoing uptrend.