FLOKI confirms a ‘double-top’ pattern: Is it the right time to buy?

FLOKI has formed a bearish double-top pattern on its one-day chart, which shows a prevailing downtrend.
Despite the recent gains, open interest has declined, indicating a lack of conviction among traders.

As a seasoned analyst with years of experience observing market trends and patterns, I find myself cautiously optimistic about FLOKI [FLOKI]. While its recent 9% surge is noteworthy, the broader context of the double-top pattern on its one-day chart and the declining open interest indicate a more complex situation.

In the past 24 hours, Floki [FLOKI] has bounced back from downward trends, experiencing a 9% growth and currently trading at approximately $0.000188. This rise can be attributed to a wider market recovery, as the overall cryptocurrency market capitalization has grown by 3.6%, surpassing $3.4 trillion.

Although there have been some advancements, FLOKI has dropped by 21% in the last week. A glance at the daily graph reveals a positive short-term momentum, but the overall long-term direction is bearish.

Analyzing FLOKI’s double-top pattern

FLOKI recently dropped below the $0.000207 support level, forming a double-top pattern, which typically suggests a bearish outlook. But, more recently, FLOKI has experienced some gains that have lessened the intensity of this downward trend.

Should FLOKI maintain its upward trajectory, there’s a strong possibility it will challenge the neckline from beneath. If this breakout doesn’t hold, we might witness a return to the downward trend, potentially leading to a drop towards $0.000124.

Instead, if the meme coin manages to surpass its current resistance level and keeps climbing, it might challenge or even disprove the bearish prediction, potentially resulting in further price increases.

In addition to keeping an eye on the significant resistance point at the neckline, investors should also be mindful of potential support levels near the 200-day Simple Moving Average (SMA), which is approximately $0.000166.

Since mid-November, FLOKI’s trading price has consistently been higher than its 200-day Simple Moving Average (SMA). Historically, this level has tended to serve as robust resistance. If FLOKI’s value falls below $0.000166, it might trigger a wave of negative investor sentiment.

Key demand zone shows…

Over 1,400 investors acquired approximately 137 billion Floki tokens when the price ranged between $0.000166 and $0.000172, as shown in IntoTheBlock’s data.

Because of the increased demand for purchases in this area, which is just a tad higher than the 200-day Simple Moving Average, traders may opt to protect it by making additional buys. This could potentially maintain FLOKI’s trading price above $0.000166.

As an analyst, I can also note that this zone may pique interest among novice investors who view it as a strategic entry point given the potential for high returns on investments in wallets that are currently priced at these levels.

Instead, if the price falls below this demand zone, it might trigger panic selling among those holders who choose to sell quickly to limit their potential losses.

Falling Open Interest shows a lack of conviction

In simpler terms, it’s typical for Open Interest (OI) to increase when a price is rising. However, contrary to this trend, the Open Interest for FLOKI has decreased instead, dropping by 10% to approximately $18 million, despite its 24-hour gains.

The falling OI also coincided with minimal liquidations of $255,000, indicating that the drop was not due to the forced closure of open positions.

Realistic or not, here’s FLOKI’s market cap in BTC’s terms

This downward trend implies that people aren’t confident about FLOKI’s price surge continuing. If trading activity stays minimal, it might affect the longevity of the upward movement.

2024-12-22 07:04

Analyzing FLOKI’s double-top pattern

Key demand zone shows…

Falling Open Interest shows a lack of conviction

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