CoinDesk reports:
The near-perfect correlation between two tokens indicates potential corrections ahead. FLOKI’s exchange supply reaches 5 billion, suggesting a 5% growth could be offset.
According to IntoTheBlock data, Floki [Floki] shows a stronger correlation with Shiba Inu [SHIB] than any other cryptocurrency. As of the time of writing, the 30-day correlation matrix between these two meme coins stands at 0.96.
Correlation matrices range from -1 to +1, focusing on cryptocurrencies’ correlations with other high-market-value currencies. Values close to -1 indicate minimal price movements in the same direction.
However, readings nearing +1 suggest cryptocurrencies move almost identically most of the time, such as FLOKI and SHIB.
As of the time of writing, FLOKI is priced at $0.00014. Over the past 24 hours, this figure has increased by 5.84%. Meanwhile, SHIB trades at $0.000015 per token, with a significantly higher rise of 15.22%.
Based on their correlation, if Shiba Inu’s price continues to rise, FLOKI may match its performance. Failure to do so could result in the token’s devaluation.
Looking at other parts of their respective ecosystems, tokens appear unable to sustain price increases. One major reason is active addresses.
Can FLOKI’s price continue to rise?
Active addresses reflect the number of users actively engaging in transactions within a given period. As of the time of writing, FLOKI has seen a decrease in 24-hour active addresses to 432.
SHIB has decreased to 3,511. A decline in this metric indicates low interaction with the token and potentially diminishing demand.
Another concern raised by AMBCrypto is how price growth outpaces network activity. When participation is low and token prices rise, there is a risk of their value declining.
If this trend persists, FLOKI and SHIB may fail to keep up with upward trends. Exchange supplies also confirm this forecast.
Exchange supply measures the number of tokens sent from external sources to exchange wallets. An increase in this metric suggests holders are willing to sell some of their tokens.
However, if token holders prefer to retire tokens for personal custody rather than keeping them on exchanges, this number decreases.
As of the time of writing, FLOKI’s exchange supply stands at 5 billion, a significant increase compared to July 5.
Reality or not, here is FLOKI’s SHIB market cap.
From a price perspective, this could disadvantage meme coins as increased sales volume may depress token values.
If this continues, FLOKI’s price could drop to $0.00012. Given its strong correlation with SHIB, a similar trend could occur.
