Floki Inu price needs to shed 20% before it becomes attractive for buyers

Floki Inu (FLOKI) price has been climbing, but certain signs suggest that this steady uptrend might not be sustained. Instead, FLOKI could slide lower, allowing buyers to accumulate the meme coin.

Also read: FLOKI price yields over 200% weekly gains for traders, sees mass profit-taking from traders

Floki Inu price ponders a correction

Floki Inu price is forming a bearish divergence in the one-hour time frame, which is very similar to what occurred in early March. Between March 1 and 4, FLOKI set up higher highs, but the momentum indicators produced lower lows, signaling a divergence. Since the indicators show a decline in momentum, the meme coin eventually triggered a 48% correction.

This pullback swept the last key swing low at $0.000105 formed on March 2, which was a buy signal. Following this, Floki Inu price triggered a near-80% move in just 13 hours.

Considering the ongoing bearish divergence between the Floki Inu price and momentum indicators, history is likely to repeat. Hence, investors can expect the meme coin to kickstart another correction. There are two key swing lows – $0.000245 and $0.000216. The first target is roughly 12% away, and the second is 22% away from the current price of $0.000278.

If the overall market outlook remains bullish, a sweep of the second swing low would be a good buying opportunity. 

Also read: Floki team responds to Hong Kong regulator warning

FLOKI/USDT 1-hour chart

While Floki Inu price does look primed for an uptrend, investors should expect a premature rally, especially if there is a spike in volatility for the crypto markets. Currently, most altcoins are just moving sideways, indicating that the market conditions are not ripe. 

But if this changes and FLOKI produces a daily candlestick close above the March 12 swing high of $0.000307 coupled with a spike in the Relative Strength Index (RSI) also setting up a higher high, it would invalidate the bearish thesis. In such a case, FLOKI could attempt a 14% rally and tag $0.000350.

(This story was corrected on March 13 at 13:30 GMT to say that a close above $0.000307 coupled with a spike in the Relative Strength Index, would invalidate the bearish thesis. The support level in the third bullet point was edited to correctly say $0.000216, not $0.216 as initially reported).