- FLOKI has been trading in a limited market since last week.
- If buyers re-enter the market after the MACD issues a buy signal, this could favor a bullish breakout.
FLOKI has been under bearish pressure given that in just one month, the price of memecoin fell by 21% on the charts. During this period, its market capitalization also fell, from $2.65 billion to $1.75 billion.
At press time, these bearish trends were still in play after losses of 1.17% in 24 hours, with the crypto price trading at $0.000183. Despite this fall, FLOKI still seems to defend its critical support. However, the lack of pressure from the buying side could have simply forced memecoin into limited consolidation.
FLOKI Price Analysis
FLOKI price has fluctuated between $0.000173 and $0.000190 over the past week. One factor that could explain the lack of a clear trend is lack of market conviction. In fact, on the daily chart, memecoin’s Chaikin money flow was negative – a sign that selling pressure was high.
Despite the negative CMF, the green bars in the volume histogram suggest that buyers have also been active. The struggle between buyers and sellers could be behind the lack of gains or significant declines that forced FLOKI to consolidate.
(Source: Tradingview)
On the charts, the Moving Average Convergence Divergence (MACD) line formed a buying opportunity after crossing the signal line. Additionally, the histogram bars appear to have turned green, indicating that buyers have become active.
If buying pressure continues to increase and exceeds selling pressure, this could support a bullish breakout for FLOKI from this consolidation range.
The derivatives market sees a slight recovery
An increase in open interest and derivatives trading volumes tends to cause volatile price movements which, in turn, support strong trends. Earlier this week, FLOKI’s open interest stood at $16 million.
However, it has since climbed to $24 million on the charts.
(Source: Coinglass)
This rise indicates that speculative interest has increased again, which could increase volatility. Despite this increase, OI was still down 50% from its mid-December levels.
Key levels to watch
The In/Out of the Money Around Price (IOMAP) metric suggests that FLOKI was stuck between a supply zone and a demand zone.
According to In the block2,090 addresses purchased 354 billion FLOKI tokens at an average price of $0.000180. This price could act as an important support level if buyers view it as an ideal entry point.
(Source: In the block)
On the other hand, a crucial supply zone lies above the price at press time at $0.000186, where 1,250 addresses purchased 70 billion tokens. This area constitutes a high resistance level as these traders could choose to sell once they become profitable.
Will FLOKI break with consolidation?
For FLOKI to break out of the consolidation range, there must be a further increase in buying activity and interest from speculative traders. If this happens, it could hint at strong market conviction that could create positive sentiment.
However, if buyers remain hesitant and FLOKI falls below the demand zone, it could lead to a bearish breakout. At the same time, a break of resistance at the supply zone could trigger a bullish recovery.
