- Fantom (FTM) is nearing a critical $0.50 resistance level, which could trigger a bull trap if it fails to maintain momentum.
- Despite recent bullish signs, analysts advise caution due to potential overbought conditions and low trading volume.
As Fantom (FTM) nears a critical resistance level, traders are on high alert for potential pitfalls that could trap unwary investors. Currently trading at $0.4874, FTM has recently shown impressive gains, up 25.29% over the past week. However, analysts are warning that the approaching $0.50 resistance level could spell trouble for the bullish narrative.
Resistance at $0.50: A Potential Bull Trap?
Despite the recent surge, analysts, including crypto expert @CryptoJobs3, have flagged the $0.50–$0.5050 range as a potential bull trap. A bearish divergence on the Relative Strength Index (RSI) raises concerns that a breakout beyond this level might not sustain the current bullish momentum. While a successful breach could push FTM toward $0.5200, the analyst advises caution against long positions at these levels.
Technical Indicators: Bullish Yet Cautious
Several technical indicators highlight the short-term bullish outlook but also signal potential risks:
- Bollinger Bands: The price is nearing the upper band, suggesting overbought conditions. The bands’ tightness indicates low volatility, which might lead to a breakout, but also increases the risk of a price pullback.
- MACD: The Moving Average Convergence Divergence (MACD) shows a bullish crossover with the MACD line above the signal line and positive histogram bars. This suggests rising bullish momentum, though the trend remains in its early stages.
- Volume: Despite recent price increases, trading volume remains low, reflecting weak conviction behind the recent gains. A breakout above $0.50, supported by increased volume, would be necessary to confirm a sustained bullish trend.
Market Activity and Open Interest
The FTM Futures Open Interest has surged to $174.85 million as of September 11, indicating heightened trader participation. This rise in open interest, coupled with FTM’s price approaching $0.50, reflects increased speculative activity. However, it also suggests potential for greater volatility.
The Total Liquidations chart reveals that as of September 11, long positions totaling $141.51K were liquidated compared to $10.28K in short positions. Binance saw a significant portion of these long liquidations. This data implies that many traders were overly optimistic, leading to forced liquidations when FTM failed to sustain its upward trajectory.
Increased Buying Pressure
On a more positive note, buying pressure for FTM appears to be rising. A recent AMBCrypto report highlights a decrease in FTM’s supply on exchanges, with a corresponding increase in off-exchange holdings. This shift indicates long-term confidence from holders. Additionally, a rise in whale transactions and exchange outflows has contributed to recent bullish momentum.
While FTM’s recent performance is promising, traders should be cautious as the token approaches the $0.50 resistance. The potential for a bull trap remains significant, and careful monitoring of market indicators and trading volume will be crucial in navigating the current volatility.
