Why did Floki Inu (FLOKI) fall 19% in a day?

TL;DR

Floki Inu (FLOKI) experienced a sharp decline of almost 20%, losing its place in the top 5 meme coins. Despite the drop, some analysts remain bullish, predicting a possible rally if the token’s price breaks a major resistance level. FLOKI bleeds profusely

The price of the popular meme coin Floki Inu (FLOKI) has dropped almost 20% on a daily basis, currently trading around $0.0001272.

FLOKI Price, Source: CoinGecko

FLOKI’s market cap fell to $1.23 billion, making it the sixth largest meme coin. Bonk Inu (BONK), whose market capitalization is $1.25 billion, edged out its rival to take fifth place.

Data analytics platform Spot On Chain revealed that Floki Inu’s withdrawal came just hours after a wallet linked to the meme’s currency deposited more than 15 billion tokens (equivalent to nearly $2.3 million ) on Binance.

The address had been inactive for two and a half years, accumulating storage at the beginning of 2022, when the price of the asset was $0.0000307. If they sold all the FLOKI tokens upon deposit, the trader’s profit would be over $1.8 million.

Large short positions create an increase in the circulating supply of the asset involved, which could cause the price to decline (assuming demand has held its level or headed south). These actions can also cause panic among investors and lead to additional selling pressure and additional pain for the bulls.

Is a rebound coming?

Some crypto analysts remained unfazed by FLOKI’s substantial drop, predicting an upcoming rally. User X Scofield envisioned an aggressive bounce in the asset’s price, possibly leaving “many on the sidelines.”

“Floki already has the strongest foundations of any meme coin, and instead of resting on its laurels, it continues to double down on the foundations. I strongly believe that FLOKI will be the leading meme coin in this bull run, and nothing has dissuaded that belief so far,” they added.

Jelle stated that the price of the token has been around the major resistance level of $0.00012789 for the past week. The trader argued that a rise above this figure could be followed by a rally of almost 60%.

As expected, $FLOKI it is retesting the support level, after pulling back from it last week

Bounce here and we’ll block the low range deviation + recovery of key support, setting the stage for a further push into the mid-range.

Let’s see! https://t.co/mxlknPg62P pic.twitter.com/KjczrJGEbE

— Jelle (@CryptoJelleNL) August 30, 2024

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