Fantom (FTM) has recently experienced promising growth, with its price increasing significantly over the past week. However, traders and investors are left wondering how long this uptrend can continue, as key indicators suggest that momentum may be starting to wane.
FTM’s price surged by 14% over the past seven days, driven by a strong bullish trend. The Average Directional Index (ADX), which measures the strength of a trend, rose sharply from 15 to 32 within just two days, signaling robust momentum. Yet, this rapid ascent has been followed by a decline in the ADX, which now stands at 28.85, down from 32 just a day earlier. This decrease raises concerns that the bullish momentum might be losing steam.
The ADX ranges from 0 to 100, with values above 20 indicating a trending market and those above 30 signifying a strong trend. FTM's recent ADX readings suggest a once-strong uptrend is now weakening, potentially indicating that the recent bullish rally may be coming to an end. Traders are closely monitoring these changes to determine if the downward trend in the ADX continues.
Another key factor influencing FTM's price is the supply available on exchanges. Between October 13 and October 14, the exchange supply of FTM dropped significantly, from 712 million to 688 million tokens. This decrease coincided with a price increase, as FTM rose from $0.66 to $0.78 over the same period.
When tokens are withdrawn from exchanges, it typically signals bullish sentiment, suggesting that holders do not intend to sell in the near term. However, after this initial drop, the exchange supply has stabilized, and any shifts in this metric could provide insight into market sentiment moving forward.
FTM’s Exponential Moving Averages (EMAs) are currently bullish, with a healthy gap between short-term and long-term lines, indicating strong upward momentum. The positioning of these EMAs suggests that recent price action is more favorable compared to longer averages, reflecting a bullish market sentiment.
However, following the recent surge, the short-term EMAs have begun to curve downward. If they cross below the long-term EMAs, this would create a "death cross," a bearish signal that could suggest a trend reversal and further downside potential.
If the bearish scenario unfolds, FTM’s price could test critical support levels at $0.65 and $0.59. Conversely, if the bullish trend regains momentum, FTM could challenge resistance at $0.76, a level it recently struggled to surpass. A successful break above this resistance could pave the way for FTM to reach $0.85 or even $0.96, its highest price since May.
As Fantom navigates this crucial phase, the coming days will be vital in determining whether the recent gains can be sustained or if a reversal towards lower support levels is imminent. Investors should keep a close eye on the ADX, exchange supply dynamics, and EMA trends to make informed decisions in this evolving market landscape. With both bullish and bearish scenarios on the table, FTM's price action will be closely watched in the days ahead.
October 2024, Cryptoniteuae