Over the last week, FTT has experienced a significant drop of 12.39% as the bearish trend has gained momentum. Nevertheless, within the past 24 hours, there was a brief respite for the asset, with a modest 1.60% increase, reaching $1.89.
Upon closer examination of the market dynamics, this temporary recovery may signal a potential lower peak before a more pronounced downturn takes place, resulting in a substantial price decrease.
Emergence of Death Cross amid Increased Distribution
Analysis of the daily chart reveals the formation of a death cross pattern in FTT—a scenario where the blue MACD line crosses below the orange signal line.
Presently, the MACD is recorded at -0.0720, while the orange signal line stands at -0.0688, with prices trading in negative territory.
A death cross occurrence typically indicates an impending wave of selling pressure, often leading to a decline in price. MACD stands for Moving Average Convergence Divergence.
The prevailing bearish sentiment is expected to persist, given the noticeable distribution of FTT by market participants. Distribution represents a phase where traders reduce their exposure to an asset through selling.
As indicated by the Accumulation/Distribution (A/D) ratio, the distribution volume reached $55.51 million at the time of reporting, marking the lowest level since the beginning of the year. If this trend intensifies, further price declines for the asset are conceivable.
Trajectory of FTT on the Price Chart
FTT finds itself at a pivotal juncture on the chart presently, having formed a significant bearish pattern identified as a head and shoulders formation.
This pattern entails a price trend that ascends while testing a critical support level termed the neckline.
As illustrated on the chart below, FTT is currently situated at the neckline level, potentially signaling an upcoming breakdown. In such a scenario, the asset could plummet by 56.59% to $0.811, aligning with the prevailing market sentiment.
The likelihood of a price downturn hinges on the maintenance of bearish conditions by key indicators—MACD and A/D.
FTT Contradicts Positive Market Trends
This latest movement in FTT’s trajectory coincides with the liquidation of the now-closed FTX exchange, which featured FTT as its native token, initiating payouts to creditors.
The exchange is preparing to dispense $1.2 billion, which includes a 9% accrued profit on assets since November 2022. A total of $16 billion will be distributed among creditors with valid claims, per reports.
Historically, such events trigger a price recovery; yet, FTT has not experienced a substantial upturn thus far, leaving the market sentiment uncertain.