Current Price Dynamics
On Tuesday, Fantom (FTM) price extended its gains, approaching a crucial resistance level. A firm close above $0.746 could indicate further upward movement. The on-chain data supports this bullish outlook, as FTM’s Exchange Flow Balance reflects a negative spike, and high fee collection suggests a rally may be on the horizon.
Potential for a Rally
Fantom’s price recently broke above its 200-day Exponential Moving Average (EMA) at $0.558 on September 17, leading to a rally of over 24% within four days. Following this rally, FTM encountered resistance at the 50% price retracement level (drawn from the March high of $1.22 to the August low of $0.264) around $0.746. As of Tuesday, the price is approaching this critical level.
If FTM breaks and closes above $0.746, it could rally over 15% to retest its June 5 high of $0.855.
Technical Indicators
The Moving Average Convergence Divergence (MACD) indicator is showing signs of a bullish crossover on the daily chart. A crossover occurs when the MACD line (blue line) moves above the signal line (yellow line), generating a buy signal and indicating that bulls are in control, which could lead to upward momentum for the Fantom price.
Additionally, the Relative Strength Index (RSI) on the daily chart is currently at 61, above its neutral level of 50 and still far from overbought conditions, suggesting that bullish momentum is building and further price increases for Fantom are likely.
On-Chain Metrics Supporting Bullish Outlook
Fantom’s on-chain metrics further reinforce its bullish outlook. Santiment’s Exchange Flow Balance metric shows the net movement of FTM tokens into and out of exchange wallets:
- A rise indicates more FTM has entered exchanges, hinting at selling pressure from investors.
- A fall suggests that more FTM tokens are leaving exchanges and are being stored in cold wallets, indicating less selling pressure.
In Fantom’s case, this metric declined from -673,150 to -3.66 million from Sunday to Monday, indicating increasing confidence among investors as they move FTM tokens off exchanges and into cold storage. This led to a 3.32% decrease in supply on exchanges.
Fee Collection Insights
Moreover, token terminal data for fee collection aligns with Fantom’s bullish outlook. The data reveals:
- Fantom collected fees of $100,829 on Sunday, the highest since November 2023.
- This high fee collection signals increasing demand for FTM’s platform usage, potentially propelling a price rally.
Risks to the Bullish Thesis
However, if Fantom’s price declines and closes below the $0.642 daily support level, the bullish thesis would be invalidated. This scenario could extend the decline by 13%, potentially retesting the 200-day EMA at $0.558.
Conclusion
In summary, the current market indicators and on-chain data suggest that Fantom’s price is poised for a potential rally, but traders should remain cautious of support levels to validate their bullish outlook.
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