- FLOKI could see a short squeeze and a share price increase of almost 8% this weekend
- Price action since April has given indications of a FLOKI consolidation around $0.00014
FLOKI suffered double-digit losses, like most large-cap altcoins in the crypto market. The steep Bitcoin [BTC] price declines due to bearish expectations and a potential recession fueled fearful sentiment.
At the time of writing, the memecoin was trading just above a support level that has served faithfully since mid-April. Will the buyers come to the rescue again, or are the bears too strong this time?
The Fibonacci level could see a FLOKI price consolidation
Source: FLOKI/USDT on TradingView
The 78.6% retracement level at $0.000138 was tested for the third time since April. The past two retests showed no immediate recovery. Instead, the price consolidated around the Fib level for a few days before climbing higher thanks to high trading volume.
At the time of writing, the downward trend was dominant. The -DI (red) crossed above the +DI (green) on the DMI indicator. The Awesome Oscillator dropped below neutral zero to indicate that bearish strength was building.
The CMF was at -0.02, and a drop below -0.05 would indicate a significant capital flow from the market. At the time of writing, a neutral CMF reading maintained expectations of consolidation.
The low open interest showed that traders were not convinced of a price recovery
In July, FLOKI rose from $0.000135 to $0.000206 and saw Open Interest increase from $36 million to $88.6 million. Since then, both the OI and the price have moved south – a sign of bearish sentiment.
Over the past two days, short liquidation positions have significantly exceeded long positions. Futures traders expected further price declines, creating ideal conditions for a short squeeze.
Is your portfolio green? View the Floki Profit Calculator
The nearest and largest liquidity pools were at $0.000178 and $0.000186, marking these as bullish targets. However, the resistance at $0.00015 is more likely to push the bulls back in the event of such an upswing. This could lead to a FLOKI consolidation phase.
Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer.