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FLOKI Confirms a ‘Double-Top’ Pattern: Is It the Right Time to Buy?
Floki has recently confirmed a bearish double-top pattern on its one-day chart, indicating a prevailing downtrend. Despite recent gains, open interest has declined, suggesting a lack of conviction among traders.
In this article, we will analyze FLOKI’s current situation and provide insights on whether it is the right time to buy.
Recent Gains: A Reversal of Fortune?
The cryptocurrency market has been experiencing a broader recovery, with Floki mirroring this trend. In the last 24 hours, FLOKI has gained 9% and currently trades at $0.000188.
However, despite these gains, the token’s long-term trend remains bearish. The recent uptick is more of an anomaly than a sign of a permanent reversal in the market.
A Double-Top Pattern: What Does It Mean?
Floki has now formed a bearish double-top pattern on its one-day chart. This indicates that there may be more selling pressure ahead, causing the token’s price to drop further.
There are two possible scenarios that could unfold based on this pattern. Firstly, if FLOKI continues its uptrend and successfully breaks through the neckline from below, it may lead to additional gains in the short-term. However, this is less likely due to the bearish long-term outlook.
On the other hand, if the token’s price fails to break above the neckline and falls back down, the double-top pattern could be invalidated. This would mean that the recent gains are merely a result of market manipulation or fake news and there may be more selling pressure ahead.
Key Support Level: A Crucial Level
FLOKI has been trading above its 200-day Simple Moving Average (SMA) since early September, but it’s essential to keep in mind that this level is not the only support. In fact, a drop below $0.000155 could lead to significant selling pressure and further downward momentum.
On the other hand, if the token manages to hold above this key level and continue its uptrend, there may be some hope for bulls yet.
Open Interest: A Lack of Conviction
One aspect that has raised red flags is the sudden drop in open interest. This metric tends to rise when the price is increasing. However, FLOKI’s recent 9% gain saw a decline in OI by 10%, suggesting a lack of conviction among traders.
This lack of conviction could indicate that traders are not participating in the rally or are not convinced that it will continue, which could ultimately impact the sustainability of the uptrend.
Is It Time to Buy FLOKI?
In conclusion, while there may be some hope for bulls if the token can hold above its 200-day SMA and break through the neckline, the current situation is far from convincing. The lack of conviction among traders raises concerns about the potential for further downward momentum.
At this point in time, it’s difficult to justify buying into FLOKI due to the bearish long-term outlook and a lack of participation from traders. However, it’s crucial to monitor the market closely and reassess as new information becomes available.
As always, make sure to do your own research before making any investment decisions and never invest more than you can afford to lose.
Source: ambcrypto.com
