Recent trading activity has seen Artificial Superintelligence Alliance [FET] prices face challenges, with a 20% decline observed over the past week. This drop occurred following a retest of a crucial pennant resistance level on the daily chart, leading to heightened bearish sentiment.
Given the overall turbulence in digital asset markets, FET’s price movements have sparked discussions regarding its potential for a rebound or further descent.
The Impact of DeepSeek AI on FET: A Ripple Effect
The influence of DeepSeek AI has played a significant role in the current market downturn, affecting sentiment not only within the crypto sphere but also across stock markets.
With DeepSeek AI’s increasing prominence, concerns have arisen regarding the competition it presents to conventional and decentralized AI networks. This bearish trend is particularly impacting projects like FET, contributing to their downward trajectory.
Is There an Undervaluation of FET?
Insights provided by Santiment’s on-chain metrics shed light on the current status of FET. The altcoin’s MVRV ratio stands at -6.744%, indicating a possible undervaluation. Historically, MVRV ratios below 1 have often preceded price rebounds.
This suggests a reduction in selling pressure for FET as it nears a crucial demand area at $1, potentially setting the stage for an accumulation phase for the altcoin.
Additionally, FET’s daily on-chain transaction volume in profit has fallen to 976K, marking a recent low. This could imply that traders are holding onto their coins rather than selling at unrealized losses, reflective of bearish market conditions.
On the flip side, there has been a notable increase in active addresses, indicating renewed interest and a likelihood of accumulation taking place.
Will FET Witness a Recovery or Decline at the Critical $1 Demand Area?
FET is currently testing the pivotal demand zone near $1, hinting at potential upcoming price movements. Amid the bearish sentiment influenced by DeepSeek AI, there might be downwards pressure on the token.
Nevertheless, the decentralized AI narrative surrounding the project could counter this bearish outlook. The uptick in active addresses adds weight to the argument for potential accumulation and hints at a possible reversal in price trends.
If FET manages to hold above the $1 mark, it could signal the beginning of a recovery phase. Conversely, a failure to defend this level may lead to further declines, especially if market conditions persist in a bearish state.