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- A bearish flag pattern has emerged, signaling potential further declines for FLOKI in the near term.
- Despite this, there is a possibility for delay or rebound.
Floki [FLOKI] has seen a substantial drop, declining by 9.94% in the last 24 hours. With new technical developments and prevailing data supporting a bearish outlook, the memecoin could continue its downward trajectory.
However, it’s important to consider that FLOKI’s downturn is not fully confirmed, leaving room for a potential rally. AMBCrypto provides an in-depth analysis to explain this.
A 65% decline for FLOKI?
This pattern is characterized by a significant price drop followed by a consolidation phase, during which the price fluctuates within a narrow range as it trends upward, before a sharp downward break.
This decline typically occurs after the price hits the major resistance line of the channel, and breaches through the support. FLOKI was trending toward the support region of the channel at press time.
Should it break from here, there are two targets to watch.
The initial target for FLOKI is the bottom of the channel, currently at 0.00009585.
Should the pattern replicate its previous major downward move prior to consolidation, FLOKI could potentially fall further to reach 0.00005373.
Source: TradingView
A potential halt may be on the horizon
According to further analysis, Coinglass has reported a significant outflow of FLOKI, particularly notable on Binance, which saw an outflow of $2.06 million worth of FLOKI in the last 24 hours.
This trend of negative netflows has persisted over the past week.
Such a negative netflow typically leads to a supply squeeze, as the limited availability of FLOKI could drive demand higher, subsequently pushing up its price.
Source: Coinglass
However, the Open Interest (OI), an indicator of market sentiment, suggests a contrasting scenario. The OI fell sharply by 25.79%, decreasing to $17.88 million.
This significant drop indicates a strong bearish outlook among traders, which could potentially undermine the effects of the current supply squeeze.
Sentiment remains bearish
Utilizing the Relative Strength Index (RSI), AMBcrypto has found that traders continue to bet against FLOKI.
Realistic or not, here’s FLOKI’s market cap in BTC’s terms
This is reflected by the RSI crossing below the neutral threshold of 50 and continuing its downward trend.
Source: TradingView
Given this momentum, the memecoin is likely to revisit the channel’s starting point at $0.00009585. If the current market sentiment persists, it could further precipitate a drop to the channel’s lower target.
