Floki Inu (FLOKI) Recovers 9% but Double-Top Pattern Hints More Drawdowns Could Be Coming

Floki [FLOKI] has recovered from bearish trends, gaining 9% in the last 24 hours and trading at $0.000188 at press time. These gains mirrored a broader market

Floki Inu (FLOKI) price analysis reveals a 9% gain over the last 24 hours, bringing its price to $0.000188 at press time. This surge follows a broader market recovery, with total crypto market capitalization increasing by 3.6% to over $3.4 trillion.

However, FLOKI’s gains are limited by a 21% loss over the past seven days. The one-day chart shows bullish short-term momentum, while the long-term trend remains bearish.

FLOKI confirmed a double-top pattern after falling below the $0.000207 neckline earlier this week. But recent gains have stalled this downtrend.

If FLOKI continues its uptrend, it will likely retest the neckline from below. A failure to break out could resume the downtrend, causing a dip to $0.000124.

On the other hand, if the memecoin manages to break resistance at this neckline and continue rising, it could invalidate the bearish thesis, leading to further gains.

Besides the crucial resistance level at the neckline, traders should also keep an eye on support at the 200-day Simple Moving Average (SMA) of $0.000166.

FLOKI has been trading above the 200-day SMA since mid-November. Based on past trends, this level has often acted as strong resistance. If FLOKI falls below $0.000166, it could create bearish market sentiment.

Many traders bought FLOKI between $0.000166 and $0.000172. According to IntoTheBlock data, 137 billion FLOKI tokens were purchased by 1,420 addresses at these price levels.

Due to the buying pressure in this zone, which is also a key demand area, traders might choose to defend it by buying more. This could keep FLOKI trading above $0.000166.

Additionally, this zone could see demand from new buyers who identify it as an ideal entry point given the high profitability of wallets that are bought at these prices.

Conversely, a drop below this demand zone could result in panic selling as these addresses decide to sell to minimize losses.

Open Interest (OI) tends to rise when the price is going up. However, this has not been the case with FLOKI, as despite the 24-hour gains, OI had dropped by 10% at press time to $18M.

The falling OI also coincided with minimal liquidations of $255,000, indicating that the drop was not due to the forced closure of open positions.

This decline suggests a lack of conviction around FLOKI’s rally. Hence, if market participation remains low, it could affect the sustainability of the uptrend.