FET: Network activity surges, scarcity tightens – Next test at $0.31

Since it successfully rebounded from a $0.19 slip, Artificial Superintelligence Alliance [FET] continued its remarkable upsurge, jumping above the short-term moving averages, EMA 20, and EMA 50. 

FET broke out of a prolonged descending channel, hitting a high of $0.29, last seen in November. As such, FET has shown strong momentum after a clean breakout, with the price closing at higher highs.

As of this writing, FET traded at $0.28, up 16.74% on the daily charts. Over the same period, its volume jumped 89% to $188 million, reflecting growing on-chain activity. 

FET: On-chain activity skyrockets

FET’s price mainly pumped due to increased on-chain activity. According to Santiment, the altcoin’s Price DAA Divergence remained positive for seven consecutive days. 

Usually, when this metric holds positive, it implies that network usage is improving faster than price movement, a clear constructive signal.

 Thus, more users are actively interacting with the network, and the prices have yet to reflect the network usage. 

Even more so, Active Addresses (24 hours) jumped to a weekly high of 1.1k, further confirming increased network usage. 

With Address climbing, backed by a positive price DAA, it tends to support future price appreciation, especially if sustained. 

Scarcity rises

Interestingly, as on-chain activity surged, most users resorted to aggressive FET accumulation. The altcoin’s Exchange Flow Balance dropped into negative territory after holding within the positive zone across previous days.

At press time, Flow Balance was -47k, indicating higher exchange outflows than inflows. Often, increased outflows mean accumulation, which reduces supply and increases scarcity.

In fact, the altcoin’s scarcity rose significantly. The stock-to-flow ratio rose to 1.6k, indicating greater scarcity. Historically, increased scarcity has accelerated upward momentum, frequently a precursor to higher prices.

What’s next for FET?

FET saw a sustained upward momentum as on-chain activity skyrocketed, backed by increased actual demand from real market participants.

For that reason, the altcoin’s Directional Movement Index (DMI) rose to 36 after it formed a bullish crossover the previous day.

Typically, when momentum indicators make such a move, it signals strong upward momentum, with the potential for continuation if buyers hold on.

Therefore, if scarcity continues to rise, supported by higher on-chain activity, FET will face the next resistance at $0.31. A move above this level will see the altcoin target the long-term EMA200 at $0.44.

For this bullish outlook to hold, FET must stay above EMA50 at $0.24; otherwise, it risks a dip towards $0.22.

Final Thoughts

• Artificial Superintelligence Alliance [FET] surged 16%, breaking out of a prolonged descending channel, and reached a high of $0.29. 
• FET surged amid rising scarcity backed by vigorous on-chain activity.