- FLOKI has formed a bearish double-top pattern on its one-day chart, indicating a prevailing downtrend.
- Despite recent gains, open interest has declined, suggesting low trader conviction.
Floki [FLOKI] has bounced back from bearish trends, gaining 9% in the last 24 hours to trade at $0.000188 at press time. These gains reflect a broader market recovery, with total crypto market capitalization rising 3.6% to over $3.4 trillion.
However, FLOKI is still down 21% over the past week. The one-day chart reveals short-term bullish momentum, while the long-term trend remains negative.
Analyzing FLOKI’s double-top pattern
FLOKI confirmed a double-top pattern after dropping below the $0.000207 neckline earlier this week. The bearish trend has weakened with recent gains.
If FLOKI continues its ascent, it might retest the neckline from below. A failed breakout could resume the downtrend, potentially dipping to $0.000124.
On the other hand, if the memecoin breaks resistance at the neckline, it could invalidate the bearish outlook and lead to more gains.
In addition to the vital resistance level at the neckline, traders should watch for support at the 200-day Simple Moving Average (SMA) of $0.000166.
FLOKI has remained above the 200-day SMA since mid-November. Historically, this level has often acted as strong resistance. A drop below $0.000166 could incite negative market sentiment.
Key demand zone shows…
Many traders purchased FLOKI between $0.000166 and $0.000172. According to IntoTheBlock data, 137 billion FLOKI tokens were bought by 1,420 addresses at these price points.
The buying pressure in this zone, just above the 200-day SMA, might prompt traders to defend it by buying more, helping FLOKI maintain levels above $0.000166.
This zone could also attract new buyers looking for entry points due to the profitability seen by wallets that bought at these prices.
Conversely, a drop below this demand zone could trigger panic selling among these addresses, who may sell to mitigate losses.
Falling Open Interest shows a lack of conviction
Open Interest (OI) typically rises with price gains. However, in FLOKI’s case, despite the 24-hour increase, OI has decreased by 10% to $18M at press time.
The decline in OI also aligns with minimal liquidations of $255,000, indicating that the decrease wasn’t due to forced closures of open positions.
This decline suggests a lack of conviction surrounding FLOKI’s rally. If market participation stays low, it may impact the sustainability of the upward trend.
Comments (0)