FLOKI’s 40% Rally Hangs by a Thread – Here’s the Ticking Time Bomb

Memecoin mania meets brutal reality as FLOKI teeters on erasing its recent surge. The culprit? A classic crypto combo of overheated speculation and whale wallets ready to dump.

Behind the hype: On-chain data shows massive accumulation during the dip—now those same ’diamond hands’ are itching to take profits. Retail traders, as always, are left holding the bag.

Bonus cynicism: Another day, another token proving that in crypto, ’fundamentals’ is just a fancy word for ’greater fool theory.’

FLOKI faces indecisiveness from traders

Market analysis also shows a continued balance between buyers and sellers, based on the netflow metric.

The exchange netflow helps track whether buying or selling pressure is dominant by subtracting the inflow of the token from its outflow.

Source: Arkham

If the result is negative, it suggests buying activity is dominant. If the result is positive, it indicates that sellers are leading. A neutral result implies a balance in pressure and a state of indecision among spot traders.

To better understand the possible direction of the asset’s next move, AMBCrypto analyzed other market factors that could influence movement.

Is a massive decline approaching?

Technical indicators show that FLOKI is flashing strong bearish signals.

The Moving Average Convergence Divergence (MACD) has formed a death cross pattern. This occurs when the blue MACD line crosses below the orange signal line.

Historically, this pattern has often preceded a market decline. FLOKI now appears to be in that same position.

Source: TradingView

The Relative Strength Index (RSI) also offered clearer insight into what could happen next. Per AMBCrypto’s analysis, every time the RSI crossed into the overbought zone, a massive price decline followed shortly afterward.

The average decline from the last three instances was 64.5%.

If this pattern repeats in FLOKI’s current movement, then a major decline is likely, which will result in a steeper market correction.

Market remains uncertain but shows a bullish tilt

The derivatives market presented a different view of FLOKI’s potential direction.

There has been a significant decline in the number of unsettled derivative contracts in the market, based on the Open Interest (OI) metric.

OI dropped by 6.08% in the past 24 hours, bringing the total value of FLOKI contracts to $21 million.

Source: CoinGlass

Interestingly, the Funding Rate shifted to the positive side at 0.0078%.

When the Funding Rate is positive, it implies that most unsettled contracts are held by long traders. While this suggests that bullish sentiment is building, liquidation data shows that the situation is not entirely optimistic.

In the past 24 hours, long traders lost $15,460 due to closed positions, while short traders lost $23,310.

The disparity between these losses shows that short positions still exist in the market, and long traders could face liquidations soon.