Fantom has retraced more than 27% since May 5. FTM has now reached an important support level. A surge in buying pressure could push the asset to $0.80 or even $1.
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Fantom is hovering near an important demand area that has historically been a rebound area. Similar price action could see the tier 1 asset surge to $0.80 or higher.
Fantom ready to bounce back
Fantom appears to have reached a key support area that could help the price rally if it continues to hold.
The Layer 1 blockchain’s FTM token has undergone a sharp correction over the past few days after it was rejected at the $0.87 resistance level. The price of Fantom is down more than 27% since May 5, recently hitting a low of $0.63. Now, the downtrend appears to be exhausted, which could lead to a bullish impulse.
Fantom has started to test the lower trendline of the parallel channel formed on its 12-hour chart. Important support levels have prevented further declines since early January, causing the pattern’s ceiling to rise each time it is tested. Similar price action could see FTM rally to $0.80 or even $1.
The Tom DeMark (TD) serial indicator adds credibility to the bullish outlook as it prepares to show a buy signal on the 12-hour chart. The bullish pattern looks set to develop into a red nine candlestick, which indicates a one to four candlestick bounce. Also, Fantom appears to have a bullish divergence against the RSI on the same time frame.
While the odds favor the bulls, uncertainty in cryptocurrencies and global financial markets could lead to a decline. Bitcoin hit a 10-month low earlier this afternoon as many crypto assets have been losing ground over the past week due to an unstable climate.
The short-term bullish outlook could be invalidated if Fantom sees selling pressure spike and dip below $0.62. In this particular case, Fantom could extend its losses to the $0.50 support.
Disclosure: At the time of writing, the author of this article owns BTC and ETH.
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