Presently, Fantom [FTM] is at a critical juncture in its price trajectory. However, based on data from the blockchain, there are indications pointing towards a forthcoming decline in its value.
Despite the emergence of a bullish pattern known as an inverted head and shoulder formation on a daily basis, the overall outlook for FTM appears to be leaning towards a bearish direction.
Technical Assessment of FTM and Significant Levels
As per the technical analysis provided by CryptoCrypto, FTM has been consolidating within a narrow range spanning from $0.472 to $0.50 over the past four days, with its current position situated closer to the lower end of this range. At the same time, it is trading under the 200-day Exponential Moving Average (EMA), signifying a downtrend.
Based on past price movements, if FTM breaches its lower support level and concludes a daily trading session below $0.469, there is a strong possibility that it might witness a downturn exceeding 8%, reaching down to $0.431. Conversely, an alteration in market sentiment leading to FTM closing above the $0.50 mark could result in an increase of 9% towards $0.55.
Nevertheless, preceding the current consolidation phase was a substantial price surge of more than 40% observed from the 7th to the 10th of September. It seems that the present market environment is favoring scalpers who operate within a range-bound market, rather than investors or swing traders.
FTM Demonstrates Bearish On-Chain Signals
At the time of reporting, on-chain data regarding Fantom is also indicating a bearish sentiment. According to Coinglass, an on-chain analytics firm, FTM’s Long/Short Ratio currently stands at 0.924. A ratio below 1 typically signifies a bearish market sentiment.
Additionally, 52% of leading traders have opted for short positions, as opposed to 48% who maintain long positions.
On the contrary, FTM’s Futures Open Interest has experienced a decline of 7.5% in the past 24 hours, hinting towards traders potentially closing out their long positions due to apprehensions regarding a probable price plummet or the existing choppy market conditions. This trend of decreasing open interest has been a consistent pattern since the 11th of September.
Furthermore, FTM’s OI-Weighted Funding Rate is in the negative spectrum, illuminating a pessimistic sentiment prevailing in the market.
After considering all the metrics, it appears that the current scenario is more favorable for the bears, who might push for further liquidation of long positions. At the moment, FTM is hovering near the $0.48 level following a decline of more than 2.5% over the last day. Concurrently, trading volume has dwindled by 27%, indicating reduced participation from traders.