Fantom has entered oversold territory while multiple technical indicators are suggesting that a price rally is underway.
The central theses
- Fantom is down more than 27% since May 5th.
- FTM has now reached an important support level.
- An increase in buying pressure could push the asset to $0.80 or even $1.
moves around a vital demand zone that historically served as a recovery zone. A similar price move could see the layer 1 asset rally towards $0.80 or higher.
Fantom prepares for the rebound
Fantom appears to have hit a crucial support area that could help prices recover if it continues to hold.
The FTM token of the Layer 1Blockchain has had a steep in recent days correction through after being rejected at the $0.87 resistance level. Fantom’s price is down more than 27% since May 5 and recently hit a low of $0.63. Now the downtrend seems to be reaching exhaustion which could lead to an upside momentum.
Fantom has started to test the lower trend line of a parallel channel that has been developing on its 12 hour chart. The key support level has prevented further losses since early January, leading to a bounce to the pattern’s upper border on each test. Similar price action could see FTM rally to $0.80 or even $1.
The Tom DeMark (TD) sequential indicator lends credence to the bullish outlook as it prepares to present a buy-signal on the 12-hour chart. The bullish formation is likely to develop as a red nine candlestick, suggesting a one to four candlestick recovery. Furthermore, Fantom seems to be creating a bullish divergence against the RSI within the same timeframe.
While the odds are favorable for the bulls, uncertainty in the crypto and global financial markets could lead to a downturn. Due to the rocky climate, many crypto assets have bled in the early afternoon for the past week.
If Fantom sees an increase in selling pressure and falls below $0.62, the short-term bullish outlook could be invalidated. Under such unique circumstances, Fantom could extend losses towards the $0.50 support level.
Source: Crypto News Deutsch