FLOKI surged 44% in the past week, bringing this memecoin to its highest level in 6 months. The price is currently still on the rise, reflecting strong interest and support from the market.
However, despite FLOKI attracting attention, the overall market conditions still pose challenges to price stability.
FLOKI is in danger
The price increase of FLOKI is accompanied by a significant rise in open interest (OI) in the derivatives market. Over the past two days, OI has skyrocketed 87%, from $40 million to $75 million, indicating growing excitement and interest from investors in this memecoin.
The sudden increase in OI reflects the fear of missing out (FOMO), as traders rush in to seek potential profits.
Additionally, the positive funding rate further reinforces this trend, indicating that long positions dominate the market. This is a clear sign of optimistic sentiment from investors, expecting FLOKI to continue its upward trend.
The macro momentum behind the recent rise of FLOKI remains mixed. The MVRV ratio (Market Value to Realized Value) is currently at 32.62%, meaning that investors who bought FLOKI in the past month are holding a profit of about 32%.
Although this figure reflects positive market sentiment, in the past, when the MVRV ratio reached this threshold, it often led to reversals, as investors tend to take profits when profits are high.
The MVRV threshold between 19% and 32% is considered a 'danger zone', as many traders tend to take profits here, which may lead to price corrections.
The fact that FLOKI is currently in the danger zone suggests that the current price increase may encounter resistance. Although the market is on an upward trend, the risk of reversal remains a concern.
Can the price of FLOKI recover?
Currently, FLOKI is trading at $0.000139, up 44% over the past seven days. This memecoin is trying to hold the $0.000132 level as a support zone – a key factor in maintaining the recent upward momentum.
If this support level is maintained, FLOKI could continue to rise and aim for the $0.000148 mark in the coming days.
However, if investor sentiment changes and traders start selling, the price of FLOKI may correct. If the support level of $0.000132 is broken, this altcoin could drop to $0.000114, invalidating the bullish argument and wiping out all recent gains.
On the other hand, if FLOKI can break through the resistance level of $0.000148, the price could continue to rise even further, with the next target being $0.000167. A successful breakout above $0.000148 would indicate that this memecoin has invalidated the bearish argument.