Fantom May Face Correction Before New All-Time Highs
A particular technical indicator forecasts that Fantom is bound for a pullback after enjoying an impressive uptrend.
Key Takeaways
- Fantom has risen by nearly 180% since early December 2021.
- Now, FTM appears to have reached overbought territory.
- If sell orders pile up, the DeFi token could retrace to $2.42.
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Fantom continues to outperform most cryptocurrencies in the market after recovering from the most recent market downturn. Still, FTM appears bound for a spike in profit-taking that could ignite a considerable retracement.
Fantom Might Briefly Pull Back
Fantom could be bound for a brief correction before marching towards higher highs.
FTM is one of the few coins that has managed to recover from the market-wide correction that began in late October 2021. While Bitcoin and Ethereum remain 30% below their previous all-time highs, Fantom is approaching price discovery mode. The 26th-largest cryptocurrency by market cap bottomed out in early December at $1.14 and has risen by nearly 180% since then.
Despite the significant gains incurred over the past month, Fantom appears to be trading in overbought territory. The Tom DeMark (TD) Sequential Indicator presented a sell signal on FTM’s 3-day chart. The bearish formation developed as a green candlestick, which is indicative of a one-to-four 3-day candlestick correction before the uptrend resume.
A spike in profit-taking around the current price levels could help validate the pessimistic outlook. Under such circumstances, Fantom could take a nosedive towards the 50% or 38.2% Fibonacci retracement levels. These key support areas sit at $2.42 and $2.12, respectively.
It is worth noting that FTM appears to be enjoying a healthy uptrend that has seen multiple corrections on the way up. For this reason, it is reasonable to assume that further buying pressure around the current price levels can generate enough momentum to invalidate the bearish thesis.
If Fantom were to break through its previous all-time high at $3.69, it would likely have the strength to continue marching forward towards $5.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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