FLOKI has faced downward pressure recently, with the memecoin experiencing a 21% decrease in price within just a month. During this period, its market capitalization dropped from $2.65 billion to $1.75 billion.
Currently, the bearish trends persist, with a 1.17% decline in the last 24 hours, leading to FLOKI trading at $0.000183. Despite this decrease, FLOKI appears to be holding onto its crucial support level. Nevertheless, the absence of strong buying pressure could have pushed the meme coin into a phase of consolidation.
Analysis of FLOKI’s Price Movement
Over the past week, FLOKI’s price has fluctuated between $0.000173 and $0.000190. One potential reason for the lack of a clear trend could be the uncertainty prevailing in the market. The memecoin’s Chaikin Money Flow on the daily chart indicates a negative value, signaling considerable selling pressure.
Despite the negative CMF, the presence of green volume histogram bars implies active participation from buyers. The struggle between buyers and sellers may be responsible for the absence of significant price gains or drops, leading to FLOKI’s consolidation phase.
On analyzing the charts, the Moving Average Convergence Divergence (MACD) line has indicated a buying opportunity post its crossover above the Signal line. Additionally, the histogram bars have transitioned to green, suggesting an increase in buyer activity.
If the buying pressure continues to strengthen, surpassing the selling pressure, there may be grounds for a bullish breakthrough by FLOKI from its current consolidation zone.
Recovery in the Derivatives Market
An upsurge in Open Interest and trading volumes of derivatives often results in volatile price movements that can support robust trends. FLOKI’s Open Interest stood at $16M earlier this week.
Presently, it has surged to $24M on the charts. This rise indicates a renewed interest in speculation, potentially leading to heightened volatility. Despite the increase, the Open Interest remains 50% lower than its levels from mid-December.
Crucial Price Levels to Monitor
The In/Out of the Money Around Price (IOMAP) metric suggests that FLOKI is currently navigating between a supply zone and a demand zone.
According to IntoTheBlock, there are 2,090 addresses that purchased 354B FLOKI tokens at an average price of $0.000180, indicating a strong support level if buyers perceive it as an attractive entry point.
Conversely, a significant supply zone lies beyond the current price at $0.000186, where 1,250 addresses acquired 70B tokens. This zone represents a potent resistance level, as traders may opt to sell when profits materialize.
Prospects of FLOKI Breaking Out of Consolidation
For FLOKI to break free from its consolidation phase, there must be a notable increase in buying activity and interest from speculative traders. Such developments could signal a strong market sentiment, fostering a positive outlook.
However, if buyers remain hesitant and FLOKI descends below the demand zone, a bearish breakout might ensue. Simultaneously, surpassing the resistance at the supply zone could trigger a bullish recovery.