Floki [FLOKI] has recovered from the bearish trend, dropping 12.2% in the last 24 hours, with a trading price of $0.000166 at the time of writing. These gains reflect a broader market recovery, with the total cryptocurrency market cap slightly down by 3.8%, exceeding $3.32 trillion.

Despite the rise, FLOKI has still dropped 21% over the past week. The daily chart shows that while short-term momentum is bullish, the long-term trend remains bearish.

Analyzing FLOKI's double top pattern

Earlier this week, FLOKI confirmed a double top pattern after breaking below the neckline at $0.000207. However, this bearish trend has weakened after the recent rise.

If FLOKI continues to rise, it may re-test the neckline from below. If the breakout fails, the downward trend may resume, leading to a drop to $0.000124.

Conversely, if the memecoin successfully breaks through the resistance at the neckline and continues to rise, it may overturn the bearish argument, leading to more gains.

In addition to the key resistance at the neckline, traders should also pay attention to the support level of the 200-day simple moving average (SMA) at $0.000166.

Since mid-November, FLOKI has been trading above the 200-day SMA. Based on past trends, this level is often a strong resistance. If FLOKI drops below $0.000166, it may trigger negative market sentiment.

FLOKI ecosystem achieves growth

Over the past year, the Floki ecosystem has achieved significant growth, launching the metaverse game Valhalla and the asset-locking DeFi platform FlokiFi. Additionally, Floki's developers have launched an educational program called Floki University aimed at improving blockchain literacy.

Floki's chief developer pointed out that this puts Floki at a completely different level from other memecoins, especially when the market shifts and people start to pay attention to fundamentals again.

On the other hand, interest in BONK is rising as efforts to reduce token supply progress. BonkDAO destroyed 100 billion tokens in November and plans to destroy 1 trillion tokens in December, which could increase the token's value due to scarcity.

Key demand zone shows

Many traders purchased FLOKI between $0.000166 and $0.000172, with 1,420 addresses buying 137 billion FLOKI tokens at these price levels.

Due to the buying pressure in this area slightly above the 200-day SMA, traders may choose to defend the area by buying more. This could keep FLOKI's trading price above $0.00016.

Additionally, this area can attract demand from new buyers, as the profitability of wallets purchasing at these prices is high, making them see it as an ideal entry point.

Conversely, breaking below this demand zone may lead to panic selling, as these addresses decide to sell to minimize losses.

The decrease in open interest indicates a lack of confidence

When prices rise, open interest (OI) often increases. However, this is not the case for FLOKI; despite a rise in the last 24 hours, as of the time of writing, open interest has fallen by 10% to $18 million.

The decline in open positions also coincides with a minimum liquidation amount of $255,000, indicating that the drop is not due to forced liquidations.

This decline indicates a lack of confidence in the market's rebound for FLOKI. Therefore, if market participation remains low, it may affect the sustainability of the upward trend.

FLOKI has formed a bearish double top pattern on its daily chart, indicating a general downward trend.

Despite the recent rise, open interest has declined, indicating a lack of confidence among traders.