FLOKI is facing a challenging market environment as the broader cryptocurrency landscape struggles. In an X post on Friday, Jelle observed that FLOKI seems to be forming a higher low at a crucial support level. Despite the recent challenges in the cryptocurrency market, FLOKI is also facing significant struggles.
Potential Rally or Decline
Jelle believes the summer’s choppy market might be ending, suggesting that FLOKI could prepare for a new rally in the second half of the cycle. However, the token’s performance has shown signs of weakness, as bulls failed to regain the $0.000176 level. Despite efforts, FLOKI has not yet retested the key resistance zone near $0.00016, signaling potential difficulties ahead.
Bearish Market Indicators
Market indicators reveal growing bearish sentiment. The Chaikin Money Flow (CMF) dropped below -0.05, signaling a significant outflow of capital from the market. Meanwhile, the Relative Strength Index (RSI) on the 4-hour chart remains firmly in bearish territory, increasing the likelihood of further losses for FLOKI in the near term. As of press time, FLOKI has been trading at $0.0001203, showing a decline of 1.775% over the past day.
Dormant Token Activity
According to the renowned analytical platform Santiment, one notable market event occurred on August 29, when FLOKI saw a surge in dormant token circulation. This spike likely indicated a wave of selling activity, as the token’s price dropped from $0.000157 to $0.000135. The short-term Market Value to Realized Value (MVRV) also fell, highlighting minor losses for holders as a large volume of selling pressure entered the market.
The mean dollar invested age, which tracks how long coins have been held, experienced a decline, signaling that older tokens were re-entering circulation. This could suggest a market reset, with room for FLOKI to make potential gains if conditions improve.
Active Addresses Trend
The daily active addresses increased, signaling greater usage and possible demand for the token. However, this positive momentum quickly faded as the bearish outlook grew stronger, driving many participants out of the market.
FLOKI Token Drops Sharply After Huge Binance Wallet TransferOpen Interest Decline
Another analytical platform, Coinglass, revealed that Open Interest (OI) rose sharply even after FLOKI reached a local high, indicating heavy short-selling. Since then, OI has steadily declined, confirming that bearish sentiment prevails.
Overall, the short-term outlook for FLOKI favors sellers. Although specific metrics hint at a potential recovery, the token remains vulnerable due to the prevailing market conditions. The current environment suggests that any positive signals may not be enough to counterbalance FLOKI’s challenges, making it a more favorable scenario for sellers in the near term.
