Market Overview
Fantom (FTM) was on a strong uptrend towards the end of September. This bullish momentum faced a setback with a market-wide price slump, primarily driven by the volatility surrounding Bitcoin (BTC). As a result, FTM formed a trading range around a key Fibonacci retracement level.
Despite the prevailing selling pressure, on-chain metrics and price actions suggest that bulls are gearing up for the next upward movement.
Short-term Consolidation for FTM
The intense bullishness in September has transitioned into a milder, range-bound price action for the $1.8 billion market cap asset. The current trading range (indicated in purple) extends from $0.608 to $0.724, and the token has been trading within this range for three weeks.
- The daily Relative Strength Index (RSI) is above neutral 50, indicating bullish sentiment, though it has trended downward recently.
- As of press time, the RSI reading stood at 52.7, indicating neutral momentum.
- The On-Balance Volume (OBV) also revealed that neither buyers nor sellers dominated during this range formation.
This scenario suggests that swing traders can leverage the range extremes for trading opportunities until a breakout occurs. Currently, the lack of volume indicates that Fantom may be in a consolidation phase.
Consolidation: Profit-Taking or Bullish Signal?
The consolidation observed since late September has seen a notable drop in the mean coin age, particularly on October 6. Simultaneously, the 30-day Market Value to Realized Value (MVRV), which had been at 20%, fell towards zero. This decline signifies FTM distribution and profit-taking activities among short-term holders.
Despite this drop, bulls have managed to defend the 50% retracement level as a support level. The age consumed metric has remained relatively stable during this period, indicating that:
- Profit-taking among short-term holders has occurred.
- The defense of key support levels could set the stage for potential price expansion northward.
Conclusion
As Fantom continues its consolidation, traders should remain vigilant for signs of breakout opportunities. The current range-bound action, coupled with the defense of support levels, suggests that FTM may be poised for its next upward movement. Keeping an eye on volume trends and on-chain metrics will be crucial for identifying optimal trading opportunities.
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