FLOKI Faces Historic Reversal Signal After 40% Surge

FLOKI has experienced a strong 40% increase over the past week, pushing this meme coin to its highest level in 6 months. The price of this altcoin is on an upward trajectory, reflecting strong market interest and support.

However, despite FLOKI attracting attention, the overall market conditions still pose challenges to the price stability of this altcoin.

FLOKI Faces Danger

The price increase of FLOKI is accompanied by a significant rise in open interest in the Derivative market. Over the past two days, open interest has increased 87% from $40 million to $75 million, indicating investors' excitement and interest in this meme coin.

This strong increase in open interest reflects a growing fear of missing out (FOMO), as traders rush to take advantage of potential profit opportunities.

Additionally, the positive funding rate further confirms this trend, showing that long-term contracts are dominating the market. This is a clear sign of investor optimism and expectations that FLOKI will continue to rise in price.

The broader macro momentum behind FLOKI's recent profits is mixed. The MVRV (Market Value to Realized Value) ratio is currently at 32.62%, indicating that investors who bought FLOKI in the past month are experiencing a 32% profit.

Although this suggests a positive market sentiment, previous instances when the MVRV ratio reached this range often led to a reversal, as investors tend to sell when profits are high.

The range of 19% to 32% in the MVRV ratio is considered a "danger zone", as many traders tend to take profits, which could lead to a price correction.

FLOKI's presence in this danger zone signals that the current price increase may face resistance. Despite the optimistic market, the risk of reversal remains significant.

Can FLOKI's Price Recover?

FLOKI is currently trading at $0.000135, marking a 38% increase over the past seven days. This meme coin is attempting to maintain $0.000132 as a support floor, which is crucial for maintaining recent profits.

If this support level is maintained, FLOKI could advance towards $0.000148 in the coming days.

However, if investor sentiment changes and traders begin selling, FLOKI's price could experience a correction. If the support at $0.000132 cannot be maintained, this altcoin could drop to $0.000114, invalidating the price increase thesis and erasing recent profits.

On the other hand, if FLOKI can break through the resistance at $0.000148, it could advance further, with the next target being $0.000167. A successful breakout above $0.000148 would indicate that this meme coin has invalidated the bearish thesis.