The FLOKI token has seen a remarkable price surge of over 140% in a week, hitting its highest level in five months at $0.00004261. This surge coincided with the resurgence of memecoins and the launch of its tokenization platform, TokenFi. But the question remains – can this rally be sustained?
Bitcoin ETF and TokenFi Launch Boost FLOKI
The recent upswing in the price of FLOKI started following New York-based Grayscale Investments’ filing for a new spot Bitcoin exchange-traded fund (ETF) on NYSE Arca. Additionally, the launch of FLOKI’s tokenization platform, TokenFi, with its native TOKEN token, on October 27, further fueled its gains. TokenFi allows users to stake their FLOKI holdings to receive TOKEN.
FLOKI/USD daily price chart. Source: TradingView
Analyzing FLOKI’s Future Price Movements
The current rally in FLOKI has pushed its daily relative strength (RSI) to its most overbought level since January 2023. This may indicate a potential correction ahead. If FLOKI‘s rally loses momentum, the FLOKI/USD pair could drop towards its 0.5 Fibonacci retracement line around $0.00003548 by October 2023, potentially marking a 20% decline from the current price.
$FLOKI is launching staking and a new tokenization platform to target the $16 trillion tokenization industry today! 🔥️️️️
Their new token is named TokenFi with the $TOKEN ticker! 👀️️️️️️
— Shelby (@CryptoNewton) October 27, 2023
On the other hand, if FLOKI manages to break above its current resistance level at $0.00004027, it may continue its ascent toward $0.00004078.
Memecoins Show Signs of Awakening
In 2023, most memecoins have underperformed leading cryptocurrencies like Bitcoin, with some even experiencing year-to-date losses. Despite this, following the Grayscale Bitcoin ETF announcement on October 19, Dogecoin (DOGE) rallied over 30%. However, its year-to-date returns as of October 27 are a modest 1.3%, compared to Bitcoin’s impressive 105% gains over the same period.
Memecoin performance 7-day versus YTD. Source: Messari
Shiba Inu, another prominent memecoin, is down 2.75% year-to-date despite a recent 25% rally in the last seven days.
Pepecoin stands out as an exception, debuting in April 2023 and showing impressive growth of over 500%. FLOKI also displays resilience with year-to-date returns of around 435% as of October 27.
DOGE/USD weekly price chart. Source: TradingView
Memecoins often attract speculators seeking maximum returns in minimal time, especially during periods of strong risk sentiment in the crypto market. However, they can also experience substantial downturns when market sentiment wanes. The future trajectory of memecoins largely depends on the impact of ETF developments on the price of Bitcoin.