Fantom Consolidates Before Uncertain Future
Fantom appears to have defined a vital area of support that could make it easier to forecast where its price will go next.
Key Takeaways
- Fantom has dropped by more than 30% over the past two weeks.Â
- Buy signals are starting to appear, suggesting FTM is oversold.Â
- Still, the Layer 1 token has yet to break through support or resistance.Â
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Fantom appears to have stabilized after incurring significant losses over the past week. Although the Layer 1 token shows ambiguity, it presents two critical price levels to which investors can pay attention in order to anticipate a potential bullish or bearish breakout.
Fantom Continues to Consolidate
Fantom appears to have reached a critical demand zone that could determine where its price will go next.
Layer 1 token FTM has seen its price decline by more than 30% over the past two weeks, going from a high of $1.68 on Apr. 2 to hitting a low of $1.10 on Apr. 11. Such a significant correction appears to have put Fantom in oversold territory as the Tom DeMark (TD) Sequential indicator presented a buy signal on Apr. 13 on the daily chart.
Still, the lack of upward pressure seen in the past few days has not helped to validate the optimistic outlook.
The formation of a parallel channel on Fantom’s daily chart appears to bring more clarity because it shows two critical price levels to pay attention to: the pattern’s middle trendline at $1.04 and the upper boundary at $1.33 could define where FTM goes next.
A sustained close above resistance might result in a 60% breakout to $2.15, while breaching the $1.04 support level can lead to a correction to the channel’s lower edge at $0.75.
Although the odds appear to favor the bulls following the TD’s buy signal, it would be preferable to wait for a decisive daily close outside of the $1.04-$1.33 price range. Only a breach of these critical support and resistance levels will resolve the ambiguity that Fantom presents.
It is worth noting that most cryptocurrencies in the market, including Fantom, remain highly correlated to Bitcoin. More importantly, the flagship cryptocurrency is flashing a few red flags after whales enter a selling spree. Caution is advised around the current price levels because if BTC loses the $39,400 support level, it could bring the rest of the market down with it.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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