The FTX Token price has dropped almost 10% from Tuesday’s high, putting its recovery in serious doubt. This could spell trouble for FTT bulls.
FTT is currently trading at $25.55, down -$0.7900, (-3.03%).
The recent weakness in the cryptocurrency market led to FTX Token finally losing the support of the 200-day moving average. FTT had been testing the important barrier for almost two weeks. However, until Tuesday, it had managed to remain above it.
The obvious catalyst was Bitcoins drop below $30,00 at the start of the week. The resulting sell-off in altcoins took FTT as low as $21.89, slightly exceeding the $22.80 price target from my 12th of June report.
Bitcoin’s subsequent reversal to $35,500 on Wednesday managed to lift FTT to $27.92, but short of the 200 DMA at $29.18.
However, BTC is starting to roll over, and this is worrying as we approach the weekend. The market has suffered several large declines between Saturday and Sunday over the last 6 weeks.
I’m not suggesting we will see the same tomorrow, but it is worth considering.
Looking at the daily chart, we see that the FTX Token price briefly traded below the horizontal support of the 23rd of May low at $22.60. However, FTT recaptured the support, which could prove to be a bullish double-bottom formation.
Furthermore, the Relative Strength Index (RSI) reading of 34.35 suggests that FTT is close to oversold.
However, until the price trades above the 200 DMA (now at $29.39), further weakness cannot be ruled out. Additionally, the important average sits close to a previously supportive trend line at $29.68.
So, for now, I maintain a bearish bias for FTT. However, that view becomes invalid on a close above both the DMA and the trend.
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