Following the recent elections, the market witnessed a surge in activity as investors diversified their portfolios to manage risks effectively. This surge has prompted Bitcoin[BTC] to achieve a new record high of $77K. Concurrently, AI tokens have also been flourishing, recording significant gains on a weekly basis, with many experiencing double-digit increases.
Contrastingly, Artificial Superintelligence Alliance [FET] maintained a stable position despite a 15% increase in value this week. Currently priced at $1.42, FET is still below its intended target of $2.
Although the ongoing bull rally typically sets the stage for FET to break out from its four-month decline, its performance lag has captured the attention of CryptoCrypto observers.
Could FET be on the brink of a resurgence?
Interestingly, FET has been on a downward trajectory since October. Despite Bitcoin’s price rise of 5%, reaching close to $72K by the end of the month, FET did not exhibit a significant response in its price movements.
One of the contributing factors to this scenario has been the emergence of meme coins leading the current ‘supercycle,’ resulting in a substantial influx of liquidity into meme-based tokens. Notably, DOGE registered an impressive daily gain of 11%.
In contrast to previous market cycles, this phase is characterized by a more balanced distribution of capital. Small-cap tokens are also witnessing double-digit hikes, a trend that FET proponents may seek to capitalize on, as per insights from CoinMarketCap.
Since the middle of June, supporters of FET have made four successive attempts to breach the $0.17 resistance level, entering an accumulation phase, as indicated by on-chain data.
About a month ago, approximately $11 million worth of FET tokens were withdrawn by investors from exchanges. This move aided in maintaining FET’s stability and averting potential declines in value.
Nonetheless, despite these assertive acquisitions, the expected impact on FET’s valuation has yet to materialize, hinting at a potential external influence counteracting bullish trends.
A bearish slant could disrupt the ongoing rally
Aside from the erratic order book activities among major holders, the breakout of FET is heavily reliant on the derivatives market, which currently exhibits a prevailing inclination towards short positions.
Since October, short-sellers have dominated the FET futures market, acting as a substantial obstacle to price escalation.
However, there’s a caveat: a considerable number of short positions could swiftly reverse if market sentiment turns against them, presenting a unique opportunity at this juncture.
As previously mentioned, investors are diversifying their investment portfolios, with a growing focus on smaller-cap tokens. This shift is particularly notable as BTC nears a zone of heightened risk.
While the interest of spot traders in targeting market dips demonstrates a bullish outlook, it might not suffice to instigate a breakout. For a significant surge to manifest, major holders must refrain from shedding their holdings.
This strategy would allow a surge in buying fervor to induce a short-covering scenario, paving the way for a bullish resurgence.
In essence, FET possesses the essential elements for a potential breakthrough. With the RSI signaling a neutral stance, the convergence of certain conditions could propel FET past its $0.17 barrier and steer it closer to its coveted $2 mark.