FLOW rides on a strong bullish wave as the alt attempts recovery to May support levels
With the crypto bulls back in swing, gains can be seen across the crypto spectrum, including those native to NFT-focused networks. FLOW happens to be in this category and a look at its price action has so far bounced back 65% from the bottom of its latest bearish cycle.
Despite its latest upside, FLOW still came short of its May support level near the $2.31 price range. Its mid-week pullback highlighted the likelihood of the trend losing momentum in favor of a correction. However, it managed to bounce back and the bulls are back in control. FLOW traded at $1.88 at the time of writing. However, can the alt secure enough bullish pressure to reach the previous support?
FLOW’s Money Flow Indicator (MFI) confirms that the cryptocurrency was heavily overbought since mid-June. Additionally, the Relative Strength Index (RSI) was in an upward trajectory and stood at 59.18 at the time of writing. However, it is not yet overbought, hence there is still room for some more upside before investor sentiment switches in favor of the bears.
FLOW’s ability to hold on to recent gains might be rooted in a recent announcement about its Teleport bridge. The announcement revealed that Ethereum users can transfer USDC to the Flow blockchain. The implication of the announcement is that it can potentially unlock the flow of a large number of funds from Ethereum. Especially from investors interested in purchasing NFTs within the FLOW ecosystem.
Reminder that you can now easily bridge $USDC from Ethereum to Flow via @BloctoApp Teleport
Venture over from $ETH and explore the gas-free Flow Blockchain ecosystemhttps://t.co/Mj2Y1qhJs6 pic.twitter.com/m8S4DmvQZJ
— Flowverse 🌊 – Discover Flow Blockchain (@flowverse_) July 22, 2022
What are the chances of disrupted flow?
FLOW NFTs generated significant activity in the last 30 days. Total NFT trades volumes soared as high as $7.01 million on 15 July but have reduced drastically since then. The NFT metrics also reveal something interesting about NFTs on the FLOW network. Investors seem more interested in the pricier NFTs revealed by the number of new or unique addresses that purchased NFTs worth more than $100,000.
NFT volumes seem to dip almost every time the price experiences volatility associated with a directional shift. If this observation holds true, then the next few days might yield another shift in favor of the downside. This is increasingly likely given the almost overbought nature of the current price level. Whales trimmed their FLOW holdings as of 22 July, thus contributing to some bearish pressure.
The above observation aligns with a drop in FLOW’s FTX funding rate. This suggests that more investors are adopting a bearish sentiment at FLOW’s current price level. This might be a sign that the current upside might be limited at least until a significant retracement. However, there is still a significant probability of an extended bullish wave if the overall market sentiment remains in favor of the upside.