- A near-perfect correlation between both tokens indicate potential corrections.
- FLOKI’s supply on exchanges hit 5 billion, suggesting that the 5% increase might be erased.
According to IntoTheBlock, Floki [FLOKI] shares a stronger correlation with Shiba Inu [SHIB] than any other cryptocurrency. At press time, the 30-day correlation matrix between both memecoins was 0.96
The correlation matrix stretches from -1 to +1 and focuses on a crypto’s correlation with others with a high market capitalization. Values closer to -1 indicate that prices rarely move in the same direction.
A two-dog race
But when the reading is close to +1, it means that the cryptocurrencies move in a similar path almost every time. That was the case with FLOKI and SHIB.
At press time, FLOKI’s price was $0.00014. This was a 5.84% increase in the last 24 hours. SHIB, on the other hand, changed hands at $0.000015. But its price increase was much higher at 15.22%.
Source: IntoTheBlock
Going by their correlation, if Shiba Inu’s price continues to increase, FLOKI might be able to match its performance. But if it does not, the value of the token might drop.
Looking at the other parts of their respective ecosystems, it does not seem like the tokens would be able to sustain the hikes. One of the top reasons for this is the active addresses.
Can FLOKI’s price continue to rise?
Active addresses show the number of users actively involved in transaction within a given timeframe. As of this writing, FLOKI’s 24-hour active addresses was down to 432.
For SHIB, it fell to 3511. When this metric falls, it means that interaction with the token is low. If this happens, it also implies that demand for the token is decreasing.
Another thing AMBCrypto considered was how the prices were growing faster than the network activity. When participation rate is low and prices of tokens increases, it puts the value at risk of dropping.
Source: Santiment
If this continues, FLOKI, as well as SHIB, might not be able to keep up with the uptrend. This prediction was also corroborated by the supply on exchanges.
The supply on exchanges measures the number of tokens sent into exchange wallets from external sources. If this metric increases, it means holders are willing to sell some of their tokens.
However, it decrease when holders of a token would rather retire the tokens into self-custody instead of keeping them on exchanges.
As of this writing, FLOKI’s supply on exchanges was 5 billion. This was a notable increase from what it was on 5th July.
Source: Santiment
Realistic or not, here’s FLOKI’s market cap in SHIB terms
From a price perspective, this could be detrimental to the memecoin as increase selling could push the token’s value lower.
If sustained, the price of FLOKI could drop to $0.00012. Since SHIB had a strong correlation with it, it might also follow in a similar direction.
