FLOKI coin’s 140% price surge sparks interest in memecoins, but its sustainability remains uncertain amid market volatility.
In a surprising turn of events, FLOKI coin has seen its price soar by 140% within just one week, reaching $0.00004261, a five-month high. This remarkable upswing coincides with the launch of TokenFi, FLOKI’s new tokenization platform. Additionally, the coin benefited from the recent announcement of a Bitcoin ETF filing by Grayscale Investments. As the crypto world pays close attention to Bitcoin hitting the $35,000 mark, memecoins like FLOKI seem to be catching up fast, even outpacing top contenders in percentage gains.
The Driving Forces Behind FLOKI’s Surge
FLOKI coin began its upward journey right after Grayscale Investments, a New York-based company, filed for a new Bitcoin exchange-traded fund (ETF) on the NYSE Arca. However, FLOKI got an extra boost from the debut of its own tokenization platform, TokenFi, on October 27. The new platform will feature its native token, TOKEN, and allow users to stake their FLOKI holdings to earn TOKEN rewards.
Yet, as exciting as this rise may seem, there are questions about its sustainability. The relative strength index (RSI) for FLOKI is now in overbought territory, something we haven’t seen since January 2023. Historically, an overbought RSI for FLOKI has often led to significant price drops. Therefore, traders should exercise caution as the coin may soon face a correction period.
Are Memecoins Making a Comeback?
Until recently, memecoins like Dogecoin and Shiba Inu have largely lagged behind other top cryptocurrencies such as Bitcoin. In 2023, most memecoins have struggled to produce impressive year-to-date (YTD) returns. Dogecoin, despite rallying 30% after Grayscale’s Bitcoin ETF announcement, currently shows YTD gains of just 1.3%. Shiba Inu hasn’t fared any better, with a YTD loss of 2.75% even after a 25% spike in the last week.
However, FLOKI and the newly minted Pepecoin are outliers. FLOKI boasts YTD returns of around 435% as of October 27. Pepecoin, a newcomer that launched in April 2023, has skyrocketed over 500%. Speculators often target memecoins for quick, maximum returns, especially when risk sentiment in the cryptocurrency market is high. The 2020-2021 bull run exemplifies this, with Dogecoin surging an astonishing 67,475% compared to Bitcoin’s 1,700% gains.
The question remains: is the rally of memecoins like FLOKI an isolated phenomenon or a sign of a broader revival? Much will depend on the outcome of the Bitcoin ETF updates and their impact on Bitcoin prices.
Proceed With Caution
For those considering investing in FLOKI or other memecoins, it’s crucial to remember the volatility inherent in these assets. A fall can be as rapid as a rise; Dogecoin serves as a cautionary tale with its 90% plunge from its 2020-2021 peak. Keep a close eye on developments in the ETF space and market sentiment before making any investment decisions.
The soaring prices of coins like FLOKI and Pepecoin may be capturing attention for now, but whether this resurgence among memecoins will last remains a topic of keen speculation. Always conduct thorough research and exercise due diligence when investing in the high-risk, high-reward world of cryptocurrencies.