FLOKI [FLOKI] Succumbs to Market Pressures, Could Drop Further After Rounded Top Pattern Appears

FLOKI [FLOKI] has succumbed to bearish trends across the cryptocurrency market, given that at press time, the memecoin was trading at $0.000227 after a 4.8% drop

Memecoin FLOKI [FLOKI] succumbed to the bearish cues across the cryptocurrency market, considering that at press time, the memecoin was trading at $0.000227 after a 4.8% drop in 24 hours.

FLOKI has also been at a loss of 9% in the last seven days amidst heavy selling pressure.

The memecoin could be set for further drops after a rounded top pattern appeared on its four-hour chart. This pattern highlighted bullish exhaustion as selling pressure increased.

Memecoin might test support at 1.618 Fibonacci level

The Relative Strength Index (RSI) showed the spike in selling activity after a gradual decline. RSI was valued at 38 at press time, suggesting that the memecoin was leaning towards being oversold.

The Awesome Oscillator (AO) also highlighted the strength of the bears. The red AO bars were negative and growing in size, indicating that the downtrend was gaining strength.

If these bearish cues persist, FLOKI will be likely to drop to test support at the 1.618 Fibonacci level at $0.00017. At this price, the rounded top pattern will have established a neckline, with a drop below this support set to accelerate the downturn.

For FLOKI to make a bullish breakout from this bearish pattern, it needs to flip resistance at $0.00024. Such an uptrend, coupled with high trading volumes, could support more gains.

On-chain cues showed mixed signals

On-chain cues around FLOKI, as per IntoTheBlock, showed that the net network growth had posted a decline. This indicated that there are fewer addresses interacting with the token.

A drop in the addresses that are in the money is also another bearish signal, as it suggests that the market sentiment is negative.

However, the slight spike in whale activity could be a bullish sign if these large addresses are buying.

In the last two days, FLOKI’s transactions exceeding $100,000 have gradually increased to 241 billion, a 173% increase in just 24 hours.

Analyzing FLOKI’s derivatives data

The derivatives market also suggested that speculative traders are bearish. In just a day, volumes in this market dropped by 3% as Open Interest (OI) fell by 11% to $29M.

This drop suggested that traders were closing their positions on FLOKI.

Realistic or not, here’s FLOKI’s market cap in BTC’s terms

Additionally, the Long/Short Ratio dropped to 0.85, which also shows that there are slightly more leveraged short positions than long positions.

A spike in long liquidations might have influenced the demand for short positions.