As of now, Fantom (FTM), soon to undergo a rebranding as Sonic, is showing a bearish trend in its technical analysis. The cryptocurrency has been experiencing significant bearish movement in the past month, with a notable 52.6% decline in just 26 days.
FTM is set to undergo a 1:1 token swap on the Binance platform, transitioning into the new Sonic token (S). The strategic move to introduce Sonic as a fresh layer-1 blockchain, offering a promising capacity of 10,000 transactions per second, may potentially drive up demand for the token in the upcoming weeks.
Continued Decline in Fantom Prices
The initial rejection of FTM at the $1.44 mark took place on December 16. Just two days later, Bitcoin (BTC) faced a 5.6% drop following bearish news surrounding the U.S FOMC meeting, which further amplified the challenges for FTM. Despite finding temporary support near the 61.8% Fibonacci retracement level at $0.659 towards the end of December, selling pressure remained dominant. In the past fortnight, sellers managed to push for a new lower low, extending Fantom’s downward trajectory.
The Relative Strength Index (RSI) has lingered below the neutral 50 mark for close to a month now, indicating robust bearish momentum. Additionally, the On-Balance Volume (OBV) dipped below the lows of November, revealing substantial selling activity in the market.
Decline in Open Interest Reaches Unseen Levels
Apart from the OBV hitting new lows, the Open Interest has also plummeted to levels not witnessed in two years, emphasizing a high level of selling pressure on the token. The ongoing token swap from FTM to S could partially elucidate these losses.
Traders might be choosing to exit their positions due to the impending swap, with exchanges announcing the delisting of FTM and the introduction of new Sonic trading pairs. This, coupled with the prevailing bearish sentiment in the market, might be contributing to the decrease in Open Interest and demand.
Disclaimer: The views expressed in this article do not constitute financial, investment, or trading advice; they are solely the writer’s opinion.