The price of Fantom (FTM) is likely to pull back in February due to a growing divergence between its price and its momentum in recent weeks.
FTM Price Rebounds 230% After Cronje’s 2023 Roadmap
FTM’s price has risen 230% in the past five weeks, trading at $0.61 on February 5. The rally is part of a broader rally in the crypto market, but has outperformed most top crypto assets due to the hype created by Andre Cronje.
Cronje is the co-founder and architect of Fantom’s layer 1 blockchain. On December 26, 2022, the developer released a letter discussing the goals and priorities for the Fantom ecosystem in 2023, including its intention to allow decentralized app developers to earn 15% of network revenue.
The FTM price has seen five weeks of consecutive gains since Cronje’s letter to the Fantom Foundation team.
The FTM/USD pair looks set to close the week ending Feb. 5 with a profit of at least 25%, helped by Cronje’s latest Twitter. thread this gives 13 reasons why Fantom will be one of the best layer 1 blockchains in 2023.
Fantom price technical details hint at an upcoming correction
Nonetheless, FTM’s ongoing rally is likely to fizzle out due to a growing bearish divergence between its rising price and falling momentum.
On the daily chart, FTM/USD has been forming higher highs since mid-January, while its the Relative Strength Index (RSI) hit lower highs. As a general rule of technical analysis, such a gap means that the bullish momentum is slowing down.
Moreover, the RSI remains above 70, which suggests that FTM is “overbought”. It also hints at near-term bullish exhaustion and possible sideways or lower price action in the coming days.
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FTM is at risk of collapsing towards $0.42, or 35% from current price levels, given the level’s recent history as resistance. Additionally, a close below $0.42 would bring FTM’s 200-day exponential moving average (200-day EMA; the blue wave) to $0.38 as a next downside target.
Overall, Fantom maintains its bullish bias as long as it stays above its 200-day EMA and the 50-day EMA (the red wave).
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.