• FLOKI’s 7.89% weekly rally mirrored the 2022 cycle, hinting at a potential bullish divergence in play.
• The current price structure remains pivotal for directional bias in the sessions ahead.

Floki [FLOKI] has recorded a 7.89% gain on the weekly timeframe, once again aligning with the price dynamics observed during its 2022 bullish leg.

In fact, this latest move is accompanied by a potential bullish divergence on the RSI, intensifying speculation of a repeat rally.

That said, price is now confronting the $0.00006 supply zone on the higher timeframe. It is a historically significant resistance level that previously acted as a high-volume distribution area. Hence, triggering a sharp corrective phase. 

Critical overhead resistance tests bulls’ resolve

Two months in, FLOKI remains range-bound, consolidating within the $0.000047–$0.00008 price band. A sharp 11.82% intraday drop on the 6th of April dragged the Relative Strength Index (RSI) deep into oversold territory, signaling potential exhaustion on the sell side. 

Meanwhile, the MACD histogram is compressing near the zero line, with a bullish crossover appearing imminent.

Together, these technical conditions may lay the groundwork for a range breakout. Yet, it remains contingent on confirmation from volume expansion and sustained bid-side pressure.

Why the hesitation? On the monthly timeframe, the $0.00006 level continues to act as a key supply zone and critical resistance. 

Since the 29th of March, FLOKI has faced three consecutive rejections at this level, each time triggering a swift retracement. Consequently, the most recent pullback saw the price drop to $0.000046 within a single week.

Unless bulls can decisively breach this overhead supply, the likelihood of a sustained breakout or extended rally continues to diminish. 

In this context, FLOKI’s current 7.89% intraday bounce may be interpreted as another opportunistic liquidity grab. In other words, it mirrors a typical pattern in range-bound markets, where traders fade rallies for short-term gains.

Inflection point ahead: Can FLOKI escape the range trap?

Floki’s sharp retracement to $0.00005 on the 7th of April was met with aggressive dip-buying, as spot volume spiked to 190.74 million – a clear sign of reactive demand. 

In fact, this influx of buy-side pressure fueled a rapid 20% recovery, pushing price back to $0.000058 at the time of writing. 

More notably, Open Interest (OI) has surged from $11 million to $22.07 million within the past week — a staggering 100% increase. Hence, indicating a significant influx of new capital into leveraged positions.

In fact, on Binance, the FLOKI/USDT perpetuals show over 60% of positions skewed long, reflecting a strong bullish delta. 

Yet, in a volatile market, FLOKI’s long-heavy positioning presents a double-edged risk. As previously noted, FLOKI’s recent 7.89% intraday rally increasingly resembles a liquidity grab. 

Now, with $11 million worth of new positions on the table, the risk of liquidation remains elevated.

Plus, spot volume has tapered to 104.13 million — a notable decline from the spike on the 7th of April. Without sustained volume inflows, a breakout above the $0.00006 supply zone looks unlikely. 

As a result, another pullback from this overhead resistance appears increasingly probable. Traders should proceed with caution.