After a week of losses, the FTM price is finding technical support at the former ATH, which is encouraging for the Fantom bulls. However, it’s the bears who will be cheering if Fantom (FTM) breaks down below $1.94. In that event, it could be a long way down for Fantom.
In the last seven days, Fantom has gained 20%, outperforming almost every other top-ranked cryptocurrency. Despite retracing around 18% from last week’s $2.4660 high, FTM’s market cap holds above $5 billion, ranking it the 36th-largest cryptocurrency, ahead of privacy coin Monero. The recent price appreciation follows an influx of capital into Decentralized Finance (DeFi) projects. Data from DefiLama.com shows the Total Value Locked (TVL) in Defi protocols surpassed $200 billion. Of course, Ethereum still rules the roost and commands a 69% slice of the pie. However, Fantom is gaining traction and may soon overtake Avalanche to become the 5th-largest Defi blockchain. Nonetheless, there are concerns the rally is overstretched, which is hardly surprising considering the FTM price was showing an 11,000% year-to-date gain at the start of last week. Regardless, there are signs the rally may soon resume.
The four-hour chart shows the FTM price has been trending lower over the last week. As a result, a descending ‘bear flag’ formation. The lower edge of the flag aligns with the former all-time high at $1.940 and notably reversed yesterday’s decline. Therefore, I consider $1.9400 a significant level of support. As long as Fantom holds the $1.9400 support, a return to the upper edge of the flag at $2.3800 is likely.
However, failure to maintain the $1.9400 level may instigate stop-loss selling, forcing the price back towards $1.5000. For now, the view is cautiously bullish. However, a close below $1.94000 invalidates this thesis.
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