FLOKI has been trading within a range-bound market for the past week.
If buyers return to the market after the MACD flashes a buy signal, it may help in an upward breakout.
Floki has been under downward pressure considering that in just one month, the note’s price has dropped by 21% on the charts. During this time, the market cap has also dropped from $2.65 billion to $1.75 billion.
At the time of writing, these bearish trends are still in play after losing 1.17% in 24 hours, with the crypto trading at $0.000183. Despite this fall, FLOKI is still defending its monetary support. However, the lack of buying pressure may have forced the note into a range-bound consolidation.
FLOKI Price Analysis
FLOKI price has been fluctuating between $0.000173 and $0.000190 over the past week. One factor that could be behind the lack of a clear trend is the lack of market conviction. In fact, on the 1-day chart, the notes’ Chaikin Money Flow was negative – a sign that selling pressure was high.
Despite the negative CMF, the green volume chart bars indicate that buyers were also active. The disagreement between buyers and sellers could be behind the lack of significant gains or declines that forced FLOKI to consolidate.
(Source: Tradingview)
On the charts, the Moving Average Convergence Divergence (MACD) line has formed a buying opportunity after crossing above the signal line. Moreover, the chart bars appear to have flipped green, indicating that buyers have become active.
If buying pressure continues to rise and outpaces the selling pressure, it could support a bullish breakout for FLOKI from this consolidation range.
Derivatives market sees mild recovery
A spike in Open Interest and derivative trading volumes tends to cause volatile price movements that in turn, support strong trends. Earlier this week, FLOKI’s Open Interest stood at $16M.
However, it has since surged to $24M on the charts.
(Source: Coinglass)
This hike indicated that speculative interest has been rising again, which could spike volatility. Despite this hike though, the OI was still down by 50% from its mid-December levels.
Key levels to watch
The In/Out of the Money Around Price (IOMAP) metric suggested that FLOKI was stuck between a supply zone and a demand zone.
According to IntoTheBlock, 2090 addresses bought 354B FLOKI tokens at an average price of $0.000180. This price could act as a strong support level if buyers see it as an ideal entry point.
(Source: IntoTheBlock)
On the other hand, the crucial supply zone is located above the squeeze time price at $0.000186 where 1250 addresses bought 70B tokens. This zone is a strong resistance level as these traders can choose to sell once they become profitable.
Will FLOKI break from the merger?
For FLOKI to break out of the consolidation range, there needs to be a fresh surge in buying activity and interest from speculative traders. If this happens, it could indicate 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 breakout past the resistance in the supply zone could lead to an upward rebound.
