FLOKI faces a historic reversal signal after a bullish 44% increase.

FLOKI rise to the sky 44% in the past week, bringing this memecoin to its highest level in 6 months. The price is still on the rise, reflecting strong interest and support from the market.

However, although FLOKI attracts attention, the overall market conditions still pose challenges to price stability.

FLOKI is in danger

The price surge of FLOKI is accompanied by a significant increase in open contracts (OI) in the derivatives market. Over the past two days, OI has skyrocketed by 87%, from 40 million to 75 million dollars, indicating growing excitement and interest from investors in this memecoin.

A sudden increase in OI reflects the fear of missing out (FOMO), as traders rush in to seek potential profits.

In addition, the funding rate (funding fee) being positive further reinforces this trend, indicating that Long orders are dominating the market. This is a clear sign of bullish sentiment from investors and expectations that FLOKI will continue to rise to the sky.

OI of FLOKI | Source: CoinglassThe macro drivers behind the recent rise of FLOKI remain mixed. The MVRV ratio (Market value to fair value) is currently at 32.62%, meaning that investors who bought FLOKI in the past month are holding an approximate profit of 32%.

Although this figure reflects a positive market sentiment, in the past, when the MVRV ratio reached this threshold, it often led to a reversal, as investors tend to take profits when the gains are high.

The MVRV threshold ranging from 19% to 32% is considered a "danger zone" because many traders tend to take profits here, which can lead to price corrections.

The fact that FLOKI is currently in the danger zone indicates that the current price increase may face resistance. Although the market is on an upward trend, the risk of a reversal remains a concern.

The MVRV ratio of FLOKI | Source: Santiment## Will the price of FLOKI recover?

Currently, the price of FLOKI is trading at $0.000139, rising to the sky by 44% in the past seven days. This memecoin is trying to hold the level of $0.000132 as a support zone – a key factor to maintain its recent upward momentum.

If this support level is maintained, FLOKI could continue to rise and head towards the milestone of $0.000148 in the coming days.

However, if investor sentiment changes and traders start selling, the price of FLOKI may adjust. In the event that the support level of 0.000132 dollars is broken, this altcoin could drop to 0.000114 dollars, invalidating the bullish thesis and erasing the entire recent gains.

FLOKI Price Chart | Source: TradingViewOn the other hand, if FLOKI can surpass the resistance level of $0.000148, the price could rise to the sky even further, with the next target being $0.000167. A successful breakout above the $0.000148 level will indicate that this memecoin has invalidated the bearish argument.

Dinh Dinh