After a month of continuous price increase with a 57% gain, Floki (FLOKI) was unable to maintain this momentum in subsequent trading sessions.
On the weekly and daily charts, this token is also performing poorly with declines of 9.7% and 0.4%, respectively. Analysis indicates that a major sell-off wave is approaching and FLOKI may continue to decline sharply.
FLOKI is facing hesitation from traders.
Market analysis also indicates that there is still a balance between buyers and sellers, based on the net flow index. The net flow index on exchanges helps track whether buying or selling pressure is dominating by taking the amount of tokens sent to the exchange and subtracting the amount of tokens withdrawn.
If the result is negative, it indicates that buying activity is dominant. If the result is positive, sellers are leading the market. A neutral result indicates that the pressure between buying and selling is balanced and reflects the hesitation of spot traders.
To better understand the next direction of this asset, the article will further analyze other market factors that may influence price volatility.
Is FLOKI about to plunge?
According to technical indicators, FLOKI is emitting strong bearish signals. The MACD indicator has formed a death cross. This pattern occurs when the blue MACD line crosses below the orange signal line. Historically, this pattern often signals a bearish scenario for the market. FLOKI is currently in a similar situation.
The Relative Strength Index (RSI) also provides a clearer view of potential future developments. According to the analysis, each time the RSI enters the overbought zone, a strong price decline typically follows. The average decline in the last three occurrences was 64.5%.
If this pattern repeats in the current trend of FLOKI, there is a high possibility of a sharp decline, leading to a deeper correction in the market.
The market remains unstable but tends to lean towards the bulls.
The derivatives market also shows a different perspective on the potential direction of FLOKI.
Based on the open interest (OI) index, the number of outstanding derivatives contracts in the market has significantly decreased. OI decreased by 6.08% in the past 24 hours, bringing the total value of FLOKI contracts down to $21 million.
Interestingly, the funding rate has turned positive at 0.0078%. When the funding rate is positive, it indicates that most of the outstanding derivatives contracts are held by traders with Long positions. Although this suggests increasing bullish sentiment, the liquidation data shows that the situation is not entirely positive.
In the past 24 hours, Long traders have lost $15,460 due to closed positions, while short traders have lost $23,310.
The disparity between these losses indicates that Short positions still exist in the market and Long traders may soon face the risk of liquidation.
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making decisions. We are not responsible for your investment decisions.