FLOKI’s price cedes its short-term gains after short-selling spree

FLOKI has a strong bearish outlook in the near term
Buying pressure seemed non-existent, with market participants fearing more volatility

As an analyst with over a decade of experience in the crypto markets, I must say that FLOKI’s near-term outlook appears to be bearish, based on the technical and on-chain indicators we’ve examined. The lack of buying pressure, the significant capital outflows, and the surge in dormant circulation are all red flags that suggest more volatility lies ahead.

As an analyst, I observed that our attempts to regain the $0.000176 region in FLOKI were unsuccessful. Our strength was insufficient to challenge the resistance zone, and we fell short of our aim at approximately $0.00016.

FLOKI’s price cedes its short-term gains after short-selling spree – What’s next?

In recent days, there’s been a substantial exit of capital from the market, as the Capital Movement Factor (CMF) dropped significantly below -0.05. Moreover, the Relative Strength Index (RSI) on the 4-hour chart is signaling bearish trends, suggesting further potential declines for the memecoin.

Hence, the question – Do the on-chain metrics agree with these findings?

Signals were bearish, but there was some hope for holders

FLOKI’s price cedes its short-term gains after short-selling spree – What’s next?

On August 29th, there was a significant increase in dormant activity, indicating a possible wave of tokens being sold. Simultaneously, the price dipped from $0.000157 to $0.000135.

Initially sitting in profit, the temporary MVRM (assuming we’re using Market Value Realized vs MVRV as described) experienced a retreat. This suggests that owners had suffered small losses due to a surge in selling, counteracting the recent price increase.

The mean dollar invested age also saw a pullback to signal old coins re-entering circulation. After trending higher for nearly three months, this was a good sign. There was room for FLOKI to make gains after the recent reset. As things stand, the buying pressure was not yet in favor of the bulls.

FLOKI sentiment worsened after the retracement

During the final week of August, as FLOKI was experiencing significant short-term growth, the number of daily active addresses also saw a steady rise. This trend suggested higher usage and potentially growing interest. Moreover, the frequency of the token’s use in transactions, indicated by token velocity, also escalated, indicating more transaction activity.

The surge in activity subsided swiftly over just a couple of days, with pessimistic feelings taking hold of the market and causing investors to withdraw. Fortunately, the expansion of our network did not suffer significant damage during this time.

Despite FLOKI reaching a local peak and subsequently retreating, Open Interest still experienced a significant surge. This suggested that there was substantial short-selling activity occurring within the markets.

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

Since then, the OI has been falling, showing that bearish sentiment was prevalent.

In summary, for the immediate future, market trends leaned towards benefiting sellers more than buyers. However, the decrease in average investment age showed a minor promising sign.

2024-09-06 11:03

Signals were bearish, but there was some hope for holders

FLOKI sentiment worsened after the retracement

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