In the final days of September, Fantom [FTM] experienced a significant uptrend. However, like many other cryptocurrencies, FTM faced a period of market-wide price volatility resulting from Bitcoin [BTC]’s fluctuations, leading to a consolidation phase around a critical Fibonacci retracement level.
Despite the prevalent selling pressure, both on-chain metrics and price action indicated that bulls were preparing for a potential upward movement.
Examining FTM’s Short-Term Consolidation
The strong bullish sentiment witnessed in September has transitioned into a more subdued, range-bound price behavior for Fantom, a digital asset with a market capitalization of $1.8 billion. This price range (highlighted in purple) spans from $0.608 to $0.724, with the token trading within this range for approximately three weeks.
Although the daily Relative Strength Index (RSI) initially signaled bullishness by staying above the neutral 50 level, there has been a recent downward trend. Presently, the RSI sits at 52.7, indicating a neutral momentum. Likewise, the On-Balance Volume (OBV) highlighted a balanced presence of both buyers and sellers during the consolidation phase.
These observations suggest that swing traders might leverage the range boundaries for trading until a breakout occurs. With the current low volume levels, Fantom seems to be in a consolidation stage.
Evaluating the Impact of Consolidation on Profit-Taking and Future Market Sentiment
During the consolidation phase since late September, there was a noticeable swift decline in the mean coin age on October 6. Concurrently, the 30-day Market Value to Realized Value (MVRV) ratio, which had previously stood at 20%, dropped close to zero. These developments indicated a distribution of FTM and profit-taking activities among short-term holders.
Despite these movements, the bulls successfully defended the 50% retracement level as a crucial support zone. Furthermore, the age consumed metric remained relatively stagnant recently. This defensive stance could potentially position Fantom for the next upward price surge.
Disclaimer: The opinions expressed in this article are for informational purposes only and do not constitute financial advice or recommendations for trading activities. It solely reflects the writer’s perspective.