- A bearish rounded top pattern appeared on FLOKI’s four-hour chart.
- The RSI also showed that after intense selling activity, FLOKI could become oversold.
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 in 24 hours.
FLOKI has also been down by 9% in the last seven days amid intense selling.
The memecoin could drop further after a rounded top pattern appeared on its four-hour chart. This pattern shows bullish exhaustion as selling pressure increases.
The Relative Strength Index (RSI) clearly outlined the spike in selling activity after a steady decline. The RSI had a value of 38 at press time, suggesting that the memecoin was leaning towards being oversold.
The Awesome Oscillator(AO) also highlighted the strengths of the bears. The red AO bars were negative and growing in size, an indication that the downtrend is gaining strength.
Source: Tradingview
If these bearish signals persist, FLOKI will likely drop to test support at the 1.618 Fibonacci level $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 data shows mixed signals
Data from IntoTheBlock showed that the on-chain data around FLOKI was bearish. The net network growth had posted a decline, indicating 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.
Source: IntoTheBlock
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.
Source: Coinglass
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.
