Cryptocurrency

The price of Fantom (FTM) risks pulling back in February due to a growing divergence between its price and momentum in recent weeks.

FTM price rallies 230% after Cronje’s 2023 roadmap

FTM’s price has grown by 230% in the past five weeks, trading at $0.61 on Feb. 5. The rally came as a part of a broader crypto market recovery but outperformed most top-ranking crypto assets due to the hype created by Andre Cronje.

Cronje is the co-founder and architect of Fantom’s layer-1 blockchain. On Dec. 26, 2022, the developer released a letter discussing the goals and priorities for the Fantom ecosystem in 2023, including his intention to allow decentralized app developers to earn 15% of the network’s revenue.

The FTM price has seen five weeks of gains in a row since Cronje’s letter to the Fantom Foundation team.

The FTM/USD pair looks ready to close the week ending Feb. 5 with at least a 25% profit, helped by Cronje’s latest Twitter thread that gives 13 reasons why Fantom will be one of the best layer-1 blockchains in 2023. 

Fantom price technicals hint at correction ahead

Nevertheless, FTM’s ongoing rally risks exhaustion due to a growing bearish divergence between its rising price and falling momentum.

On the daily chart, FTM/USD has formed higher highs since mid-January, while its relative strength index (RSI) has made lower highs. As a rule of technical analysis, such a discrepancy means that the upside momentum is slowing.

In addition, the RSI remains above 70, suggesting FTM is “overbought.“ It also hints about short-term bullish exhaustion and possible sideways or downward price action in the coming days.

Related: Crypto quick hits: 8 simple steps to multiple weekly winners

FTM risks crashing toward $0.42, or 35% from current price levels, given the level’s recent history as resistance. Moreover, a close below $0.42 would bring FTM’s 200-day exponential moving average (200-day EMA; the blue wave) at $0.38 into view as the next downside target.

Overall, Fantom maintains its bullish bias as long as it remains above its 200-day EMA and the 50-day EMA (the red wave). 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Articles You May Like

US and Japan plan biggest upgrade to security pact in more than 60 years
The Fed hasn’t touched interest rates since July, but they’re still moving. What that looks like for credit cards, mortgages and savings accounts
With tax time ticking, munis begin to feel pressure ahead of $9.2B new-issue calendar
CalPERS takes stance against tax initiative
Russia declares invasion of Ukraine a ‘war’