Fantom: FTM price grow up 5% the day before, but sellers may soon take the lead
Disclaimer: The information presented does not constitute financial, investment, business or other advice and is the opinion of the writer only.
Fantom (FTM) is up nearly 7% from the previous trading day low. Lower futures indicators show an uptrend. However, caution is needed, especially for buyers.
Bitcoin [BTC] hovers just below the stiff resistance area at $20.8k, with Fantom also facing strong selling pressure at $0.237 last week. Due to the appearance of temporary minor resistance, short selling opportunities are found on the risk side for FTM. Will the bulls make it through?
Fantom (FTM) - 12-hour chart
The 12-hour chart shows a strong downtrend in progress. This has been happening since mid-August, when FTM broke below the swing high of $0.37 to test $0.285 as support and retest $0.32 as resistance.
Another factor highlighted on the chart is the higher time range (yellow) from $0.21 to $0.42. The midpoint of this range is found at $0.315, and it has acted as support and resistance several times since May.
The downtrend over the past few weeks suggests that a lower timeframe trader may be bearish.
FTM - 2 Hour Chart
On the two-hour chart, we can see another range being established. Highlighted in blue, this price ranges from $0.235 to $0.219, with an average of $0.227. At the time of writing, the price has reached the top of the range, which has been a tough resistance area for the past ten days.
A breakthrough is possible, but context could be key here. Bitcoin is holding below the $20.8k resistance and FTM is also in a downtrend higher. Despite the gains over the past few days, a selling opportunity has come close.
The Relative Strength Index (RSI) shows bullish momentum as it climbs to 64, but Exchange Volume (OBV) has only been flat for the past week. Hence, despite a strong bounce from the lows of the range, neither OBV nor price action is pointing towards a decisive breakout.
The resistance area, marked in red, acted as support in mid-September. Therefore, it could prove fundamental again in the coming hours.
Conclusion
Buying an asset near resistance can work in a strong bull market, but Fantom doesn't have that bias. In fact, he is leaning towards a short term range and a long term downtrend.
Therefore, a low-risk short sale can be opened in the $0.237 area. The invalidation of this bearish concept would be an hourly close above $0.241. The mid-range value and the low end of the range could be bearish targets.
Sep 28, 2022
