Floki (FLOKI), a meme coin created by fans of the Shiba Inu (SHIB) project, has experienced a 20% price drop in the last 24 hours. This sharp decline followed the reactivation of a previously dormant wallet.
As of this writing, FLOKI’s price is $0.00012. This on-chain analysis explains why the token might hit another low point before recovery comes to its rescue.
Floki Dormant Wallet Sends the Meme Coin into Freefall
Earlier today, Spot On Chain reported the reactivation of a wallet that had been dormant for two and a half years. According to the on-chain analytics platform, the wallet is connected to the Floki team and is directly linked to the deployer.
Moments after the rebirth, the wallet transferred 15.22 billion FLOKI tokens to Binance. At the time of the transaction, the tokens were valued at $2.27 million.
Sending crypto into centralized exchanges is usually a bearish sign. Therefore, it was unsurprising that the meme coin’s price plummeted a few hours after the development. The transactions also indicated that the addresses have held since the price was $0.000030 in 2022.
Read more: What Are Meme Coins?
However, it appears that the wallet is not the only party moving the cryptocurrency. According to IntoTheBlock, the number of addresses holding between $100,000 and $10 million has decreased.
Typically, when this group of holders grows, it signals accumulation, often foreshadowing a price increase. Conversely, a decrease, as seen with FLOKI, suggests rising selling pressure.
Meanwhile, Floki’s team told BeInCrypto that Spot On Chain wasn’t quite right its conclusions. According to them, the tokens sent to this wallet were related to migration due to the FLOKI contract upgrade that occurred in January 2022.
“They are only ‘linked’ to us to the extent that they are linked to all FLOKI holders who were eligible for the 1:1 token migration,” Floki team explained.
The team added that the movement was possibly geared toward a Simon’s Cat (CAT) airdrop for FLOKI holders who own at least 400,000 tokens on-chain and on Binance.
“That day marked a major event for FLOKI holders, as 10% of the CAT supply was airdropped to holders of the FLOKI token on Binance’s exchange. The snapshot took place on August 29th at 23:59:59 UTC. It is probable that FLOKI tokens in general were sold around the time of the snapshot, as some were specifically bought for this purpose or anticipated a price drop,” the team noted.
FLOKI Price Prediction: The Meme Coin Might Slide Below $0.00010
From a technical perspective, FLOKI’s price could experience further decline, as indicated by the Balance of Power (BoP). The BoP is a technical indicator that measures the strength of buyers versus sellers in the market. A higher BoP reading reflects stronger buyer momentum.
However, on the daily FLOKI/USD chart, the BoP is currently down, signaling ongoing selling pressure. If this trend persists, FLOKI’s value could continue to drop, with a potential move toward $0.000096.
Read more: 7 Hot Meme Coins and Altcoins that are Trending in 2024
Despite this, Scofield, a crypto trader on X, suggests that the meme coin’s price might see a significant bounce once the market stabilizes.
“When the current dip in FLOKI ends, I expect it to bounce back aggressively as it historically has, leaving many sidelined. Floki already boasts the strongest fundamentals of any memecoin, and instead of resting on its laurels, it continues to double down on fundamentals,” Scofield opined.
Disclaimer
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