As Bitcoin dipped below $28,000 on May 8th, most altcoins, including Fantom, experienced a surge in selling pressure. While the broader market attempts to recover, it's crucial to identify such signals to stay ahead of the curve and capitalize on market fluctuations.

Key Takeaways

• The coin's on-chain metrics and open interest situation reaffirmed the seller’s edge.
• The current price action, EMAs, and RSI suggest a bearish near-term edge for FTM while leaving room for a potential trend reversal.

Technical Analysis: Fantom's Price Action in 2023

Throughout 2023, Fantom's price action has been recovering, bouncing back from a 2-year support level in the $0.16 region. This solid rebound on the daily chart in early 2023 demonstrates the bulls' effort to gain momentum. During this time, the price action formed a long-term up-channel or ascending channel (yellow). An ascending channel indicates an upward price movement in a bull market and, from a cyclical perspective, a potential reversal.

Recently, the price reversed from the upper trendline of the ascending channel. The pulldown on February 23 from this upper trendline led to a near-term downtrend in the Fantom market, with bears gaining more traction.

The Exponential Moving Averages (EMAs) corroborate these effects. EMAs help traders understand market buying and selling edges by calculating the average price over a specific period, giving more weight to recent prices.

A bearish crossover occurred between the 20 EMA (red) and the 50 EMA (white), indicating a short-term edge for sellers. A bearish crossover happens when a shorter-period EMA crosses below a longer-period EMA, signaling a potential price decline. If a bearish cross or death cross occurs between the 20/200 EMA, it could lead to a relatively long-term selling edge.

The Relative Strength Index (RSI) has struggled to stay above 50, indicating a balance between buying and selling pressure. The recent price fall pushed the RSI toward the oversold area, suggesting that buyers might attempt to turn the tide in their favor. To understand the potential of a reversal, let's dive deeper into the on-chain metrics.

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FTM On-chain Analysis & Open Interest Overview

Active address count is essential to understanding the network's usage and overall health. FTM's active addresses count has gradually declined since the beginning of 2023, implying a decrease in network activity. The price rallied between March and April 2023, but the Daily Active Addresses (DAA) fell, signaling a potential divergence between price and network activity. This divergence could suggest that the rally might not be sustainable in the long term.

A decrease in DAA could also indicate a reduction in demand for FTM tokens, as fewer users actively participate in the network. This lack of demand can lead to price stagnation or decline. In contrast, a rising DAA is a positive signal, as it shows increased demand and network usage, often leading to price appreciation.

The futures Open Interest Rate indicates the total number of outstanding futures contracts market participants hold. Lower open interest could also signify reduced trading activity and interest in FTM. In a bullish market, rising open interest typically corresponds with rising prices, reflecting increased interest and commitment from traders. Conversely, falling open interest in a bearish market suggests that traders are closing their positions, possibly due to a lack of confidence in the asset's future performance.

The recent decline and overall market sentiment caused a decrease in the 24-hour open interest among traders, aligning with the 24-hour price decrease. The overall sentiment favored sellers, but a sustained oversold position could lead to a potential reversal rally in the near future.

It's important to note that external factors such as market news, sentiment, and macroeconomic events can also affect open interest. Monitoring these factors, technical indicators, and on-chain metrics can provide valuable insights into FTM's overall market sentiment and potential price movements.

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FTM Price Prediction 2023

The price of FTM is still in a relatively low volatility phase and is close to the EMAs. A high volatility move could be imminent. If the RSI recovers above 50, buyers can consider this a sign of a strong comeback and trend reversal.

In a bearish scenario, any close below the $0.33 support could push the coin into a bearish price discovery, with the first major support level at $0.27.

If buyers regain control and initiate a reversal above the $0.46 resistance, long-term recovery could follow, potentially retesting the $0.8 levels in the coming months. Considering all factors (sentiment, technical, etc.) collectively rather than in isolation before making any decisions is crucial.

Should You Invest in FTM?

Considering the technical and on-chain analysis, it's essential to carefully asses the market conditions when deciding whether to invest in FTM. Buyers can look for multiple reversal signs to assess the condition. For instance, RSI’s close above the midline alongside a bullish crossover on the EMA could confirm a reversal.

As with any investment, weighing the potential risks and rewards before deciding is crucial. Finally, Tracking Bitcoin's movement is essential, as FTM shares a high correlation with BTC. The Okto DeFi App delivers a decentralized storage solution for FTM tokens and presents users with an extensive array of DeFi investment possibilities, all in a self-governed platform.