Embroiled in the controversy surrounding ‘DeFi godfather’ Andre Cronje’s crypto departure, Fantom’s FTM has seen better days in the market. Its price was trading at a 40% discount when compared to a local peak of $2.0 just days ago. Attempts to defuse the situation seem to have fallen short of notice, with FTM ticking up by just 3.5% even after the Bitcoin pump yesterday. However, top Ethereum whales were not deterred by FTM’s near-term decline. At the time of writing, FTM traded at $1.27, down by 11% over the last 24 hours.
Whale Purchases
Ethereum whales have been active during the current market dip. Data from Whalestats showed that the top 100 Ethereum wallets were buying Fantom, with the alt featuring on both, the top 10 purchases, and the most used smart contract list. Additionally, FTM briefly held the spot as the most bought altcoin among the top 500 Ethereum whales before losing its spot to ENS later during the day.
Fantom Price Action Daily Chart
A quick observation of Fantom’s daily chart gave an understanding as to why Ethereum whales were mopping up FTM. The price was trading at a major support area between $1.27-$1.44. The area was responsible for FTM’s 163% ascent to $3.4 between mid-December-mid January. In technical analysis, price zones that trigger sharp rallies often carry a higher chance of bullish reversals. The importance of the area was also highlighted by the Visible Range Profile. The tool helps understand where the majority of traders place their buy/sell orders. Zones that record a high level of trading activity function as stronger support than other regions.
The daily RSI also lent a helping hand to those placing bullish bets. The index was a few points away from oversold levels, suggesting that the alt would soon trade below its perceived intrinsic value. Traders rely on such price discounts while setting up buy orders.
Should FTM’s ‘demand area’ area trigger a price reversal, FTM can set up a comeback to a resistance point of $1.78. From there, the 200-SMA (green) would be challenged before FTM can rise to a
Price Strategy
Placing a bullish trade on Fantom was almost a no-brainer, considering the price action combined with a near oversold RSI and whale purchases. Buy orders can be set at the lower limit of the demand area at $1.13, take-profit at $1.76, and stop-loss at $0.94, just below FTM’s last defensive resort. The hypothetical trade setup carries a 1.28 risk/reward ratio.