Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
The crypto-market still remains strongly bearish, and fear is being felt by many market participants. It is not unlikely that Bitcoin could drop further in the days and weeks to come. However, in the short term, Bitcoin found some demand in the $33.5k area.
Fantom dropped as low as $1.7 from $3 when Bitcoin dropped from $43k to $34.5k. Despite this drop, Fantom still appeared to have some buyers. Could this sentiment drive Fantom higher in the near term?
Source: FTM/USDT on TradingView
Bitcoin dropped to $34.5k and bounced to $36k over the past couple of days and then dropped lower in search of buyers and found them in the $33.5k-area. During the second, smaller drop, many altcoins made lower lows. However, Fantom actually made a higher low at $1.9.
Plotting Fibonacci retracement lines for FTM’s bounce from $1.77 to $2.41, we can see that $1.9 is the 78.6% retracement level for this move and also had confluence with a long-term support level.
At the time of writing, the price found support at $2.16 and was attempting to climb higher. In the scenario that BTC trades sideways for the next day or two, FTM could see further gains and could climb as high as $2.59, provided it flips the $2.32-level from resistance to support.
Rationale
Source: FTM/USDT on TradingView
The sharp drop from $3 to $1.77 saw the RSI plummet to the oversold zone. However, over the past 12 hours or so, the RSI has actually managed to climb past the neutral 50 level once more. When it bounced from the 38.2% retracement level at $2.16, the RSI was at 52.1.
It is too early to tell but this shows that FTM could rise higher. The $2.32-resistance level is a strong supply area, however.
The OBV has been gradually declining over the past week, but in the past three days, the OBV has actually risen a significant amount. This suggested that strong demand is indeed present behind FTM’s relief rally.
The 27.2% extension level can serve as a short-term bullish target.
Conclusion
In the short term, the previously bearish market structure had been broken when the price of FTM rallied past the lower high at $2.17. At the time of writing, this level was flipped from resistance to support. However, the $2.32-resistance level remained strong.
The indicators pictured decent bullish momentum coupled with strong buying. Provided Bitcoin does not see a sharp drop once more, FTM could gain value in the next few days and climb as high as the $2.55-$2.59 area.
