16 Aug 2024 Samantha McLauren
Fantom (FTM) Is On The Rise, Will The Momentum Continue?
In the past seven days, Fantom (FTM) has experienced a resurgence of bullish sentiment, as the price surged 18% from $0.29 to a weekly high of $0.37.
Source: CoinMarketCap
As of writing, FTM was trading for $0.373. With a gain of more than 10% in the last day, the token outperformed Ethereum (ETH) and Bitcoin (BTC).
According to CoinMarketCap, trading volumes have also increased by 44%, most likely due to traders capitalizing on the upward trend. What then is the FTM rally's motivation?
DeFi analyst returns to the Fantom ecosystem
After changing its name to Sonic Labs, Fantom Labs recently revealed that Andrew Cronje, a specialist in decentralized finance (DeFi), will take on the role of Chief Technology Officer (CTO).
Fantom Sonic, a scalable new generation network that will replace Fantom Opera, will be launched with significant assistance from the DeFi developer.
FTM holders will be able to convert their tokens at a 1:1 ratio to a new $S token upon the launch of the Sonic Network.
Cronje's participation in Fantom has historically served as a catalyst for expansion. For example, rumors that Cronje would be returning to the project caused FTM to spike up 45% in 2022.
The recent uptrend in the price is a replication of past movements. These rallies, though, may not last long if there are weak fundamentals.
Can FTM continue its positive trend?
An examination of the technical indicators indicates that the uptrend is waning. The positive short-term momentum is indicated by the Moving Average Convergence Divergence (MACD) line, which is above zero.
The MACD, on the other hand, is trending below the signal line, indicating that the rally may be wearing off.
Even with the presence of buying pressure, the Chaikin Money Flow (CMF) analysis revealed a steady decline in buying pressure. Despite reaching a lower low, the CMF's value remained positive at 0.13.
Despite the price increase, the declining CMF indicated a bearish divergence and suggested that FTM would likely test lower support levels.
FTM will fall to the 0.618 Fibonacci level at $0.36 if the uptrend breaks. There is also a lower support level at the 0.382 Fib ($0.352).
If buyers enter the market again, FTM might rise to levels above $0.408, which it was above earlier this month.
A significant portion of FTM addresses were "out of the money" (in losses) at the time of publication, according to data from IntoTheBlock. There could be more drops in the price of FTM if these addresses decide to sell in order to reduce losses.
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