- A bearish flag pattern has emerged, indicating a possible further decline for FLOKI in the near term.
- Nevertheless, the possibility of delay or recovery exists.
Floki [FLOKI] has seen a substantial decline, down 9.94% in the last 24 hours. With new technical developments and prevailing data supporting a bearish outlook, the memecoin could continue its downward trajectory.
However, it is important to consider that FLOKI’s downturn has not yet been fully confirmed, leaving room for a potential rally. AMBCrypto provides an in-depth analysis to explain this.
A 65% drop for FLOKI?
This pattern is characterized by a significant price decline, followed by a consolidation phase, in which the price fluctuates within a narrow range as it moves upward, before a sharp downward breakout occurs.
This decline typically occurs after the price reaches the channel’s main resistance line and breaks through support. FLOKI was leaning towards the channel’s support area at the time of writing.
Should things break from here, there are two targets to keep an eye on.
The initial target for FLOKI is the bottom of the channel, currently at 0.00009585.
Should the pattern repeat the previous large downward move before the consolidation, FLOKI could potentially fall further to 0.00005373.
Source: TradingView
A possible stop may be in the offing
According to further analysis Mint glass has reported significant FLOKI outflows, especially notable on Binance, which saw an outflow of $2.06 million in FLOKI in the last 24 hours.
This trend of negative net flows has continued over the past week.
Such a negative net flow usually leads to a supply squeeze, as the limited availability of FLOKI could increase demand, which could push up the price.
Source: Coinglass
However, the Open Interest (OI), an indicator of market sentiment, suggests a contrasting scenario. OI fell sharply by 25.79%, falling to $17.88 million.
This significant decline signals a strong bearish outlook among traders, which could potentially undermine the effects of the current supply squeeze.
Sentiment remains bearish
Using the Relative Strength Index (RSI), AMBcrypto has discovered that traders continue to bet against FLOKI.
Realistic or not, here is FLOKI’s market cap in BTC terms
This is reflected by the RSI falling below the neutral threshold of 50 and continuing its downward trend.
Source: TradingView
Given this momentum, the memecoin is likely to revisit the channel’s entry point at $0.00009585. If current market sentiment continues, it could trigger a further decline towards the channel’s lower target.
