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Cryptocurrency News Articles

FLOKI's Woes Deepen: Nosedive Amidst Bearish Indicators and Waning Demand

Mar 23, 2024 at 08:00 am

FLOKI's Woes Deepen: Nosedive Amidst Bearish Indicators and Waning Demand

FLOKI's Woes: A Tailspin of Declining Demand and Bearish Indicators

Is FLOKI's Price Nosedive a Sign of Trouble Ahead?

Dog-themed meme coin Floki has taken a nosedive, with its value plummeting by 10% in the past week alone. This latest drop is just the tip of the iceberg, as FLOKI's open interest has also plunged by double digits during the same period.

Waning Demand: The Root of FLOKI's Decline

What's driving FLOKI's freefall? According to CoinMarketCap's data, it's a steep decline in the token's network activity. Santiment's data paints a grim picture, revealing a significant drop in FLOKI's demand, as measured by its seven-day moving average.

For instance, the daily count of addresses involved in FLOKI transactions has taken an 81% hit. Similarly, the number of new addresses created daily to trade FLOKI has nosedived by 82%.

On-Chain Analysis: Uncovering the True Extent of FLOKI's Struggles

A closer look at FLOKI's on-chain activity reveals that the dip in demand stems from a gradual rally in realized losses from daily transactions involving the meme coin. AMBCrypto's analysis shows that for every FLOKI transaction ending in a loss, only 0.85 transactions return a profit.

Bearish Signals Dominate: FLOKI's Technical Outlook

Technical indicators paint a bearish picture for FLOKI. Its Moving Average Convergence Divergence (MACD) shows the MACD line positioned below its signal line, indicating a weakening of the asset's short-term momentum relative to the longer-term momentum. This crossover is often interpreted by traders as a signal to consider selling or shorting.

Furthermore, FLOKI's Chaikin Money Flow (CMF) is trending down and poised to breach its center line. Resting on the zero line, FLOKI's CMF suggests a significant decline in liquidity inflow into the market. A decline in an asset's CMF indicates that selling pressure is intensifying relative to buying pressure, leading to a further price decline.

Futures Market Woes: FLOKI Traders Exit in Droves

The meme coin's futures market is also facing headwinds. Open interest has been on a downward trajectory since March 14th. As of this writing, it stands at $21 million, down 25% from its previous level. This decline suggests that FLOKI futures traders have been closing their positions without opening new ones, contributing to the token's value erosion.

The Verdict: A Stormy Outlook for FLOKI

FLOKI's current trajectory paints a gloomy picture. Declining demand, bearish technical indicators, and a dwindling futures market suggest that the meme coin is facing significant challenges. Whether FLOKI can weather the storm and regain its former glory remains to be seen. However, based on the current data, investors may want to proceed with caution before betting on this dog-themed token.

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Other articles published on Oct 31, 2024