- FLOKI’s RSI made lower highs in the past 12 periods.
- The rising spot demand was encouraging for the bulls.
FLOKI [FLOKI] saw a brief pullback when Bitcoin [BTC] slumped from $69k to $59.5k on the 5th of March. It gained 103.65% from the low to the high within the past 36 hours, but there were signs of exhaustion.
The incredible strength behind meme coins means that despite over-extended conditions, FLOKI could continue its rally. Traders must thus exercise caution and wait for opportunities.
The momentum appears to have slowed down
The 12-hour chart of FLOKI saw the RSI moving well above the 70 mark, which indicated overbought conditions.
It was a sign that bullish momentum was inexorable, but at the same time, a divergence was spotted.
The price has made a higher high, while the RSI made a lower high. This bearish divergence between price and momentum suggested that we could see FLOKI prices pull back.
An examination of the 4-hour price chart showed that the $0.000146-$0.000166 was a key demand zone. However, a retest of this zone would see FLOKI shed 35%.
Given the high buying pressure behind the token, seen from the OBV making strong higher highs, such a deep pullback might not arrive.
Traders need to be prepared for a consolidation phase near the $0.000238-$0.00025 area before a bullish breakout past $0.00026 arrives.
On the other hand, a drop below $0.0002 would suggest that the short-term bias is bearish. In that scenario, traders could wait for the lower timeframe structure to break bullishly before buying.
The sentiment has not shifted toward the bears yet
Author: Akashnath S
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