Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- Fed is likely to increase rate hikes to tame inflation
- Macroeconomic headwinds could sustain FTM’s short-term price action
Fantom [FTM] dropped below $0.42 following the remarks of Fed Chair Jerome Powell on March 7. Powell told the U.S Senate Banking Committee that inflationary pressure has been way higher than expected.
The aforementioned position points to possible aggressive rate hikes. As expected, investors priced in the remarks as Bitcoin [BTC] dropped below $22K. Similarly, FTM and the rest of the altcoin market faced sustained sell pressure too. In fact, FTM was down by 8.5% over the last 24 hours, according to CoinMarketCap.
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The plunge persists; where can investors book gains?
Source: FTM/USDT on TradingView
On the lower timeframe chart (4 hours), FTM rallied before a price rejection claimed all the gains. FTM’s price action in mid-February formed a double-bottom pattern, a bullish formation that offered investors 24% gains after retesting the overhead resistance of $0.5951.
However, the correction after the rejection has set FTM to depreciate by 35%, at the time of writing. The drop chalked a descending channel before FTM entered a consolidation range of $0.3944 and $0.4265 over the past few days. Prevailing macroeconomic headwinds could sustain the drop below the price consolidation.
Therefore, FTM could continue oscillating between the highs and lows of the descending channel (orange). Short-term bulls could seek new buying opportunities at the channel’s mid-level or the lower boundary of $0.3857 and $0.3552, respectively. The targets will be the channel’s mid-level, 13-period EMA, 26-period EMA, or the channel’s upper boundary.
On the contrary, short-sellers could short the token if it fails to close above the channel’s mid-level and target its lower boundary. An extended drop below the channel could be checked by $0.3162.
The OBV (On Balance Volume) has recorded fluctuations since mid-February, while the RSI (Relative Strength Index) stayed below the 50-mark over the same period. It highlighted limited buying pressure as FTM traded within a range.
The Funding Rate fluctuated as MVRV flipped to negative
Source: Santiment
According to Santiment, FTM’s Funding Rate has fluctuated over the past few days, showing unstable demand in the derivatives market. This has undermined a strong recovery or breach of the price consolidation range. Similarly, monthly holders have cleared all gains and sustained losses since mid-February. This can be evidenced by the 30-day MVRV (Market Value to Realized Value) ratio.
Read Fantom’s [FTM] Price Prediction 2023-24
However, there seemed to be some short-term accumulation, as evidenced by a slight spike in supply out of exchanges. It could point to a potential price recovery if the channel’s mid-level ($0.3857) prevents a further drop.
