Fantom (FTM) threatens correction as profit taking skyrockets
Fantom continues to outperform most cryptocurrencies in the market after recovering from the recent market downturn. However, FTM appears to be seeing a surge in profit taking, which could trigger a significant pullback.
FTM can trace
FTM is one of the few coins that has managed to bounce back from a market-wide correction that began in late October 2021. The 26th largest cryptocurrency by market capitalization bottomed at $ 1.14 in early December and has risen nearly 180% since then.
Despite the sizeable gains last month, Fantom appears to be trading in the overbought territory. The Tom DeMark (TD) Sequential indicator shows a sell-signal on the FTM 3-day chart. The downtrend formation developed as a green bar representing a 1- to 4-day candlestick correction before resuming the uptrend.
An increase in profit-taking around current price levels could exacerbate the downward outlook. In such an event, Fantom could slide towards the Fibonacci retracement level of 50% or 38.2%. These key support areas are priced at $ 2.42 and $ 2.12, respectively.
It’s worth noting that FTM appears to be enjoying a healthy uptrend that has seen several corrections on its way up. For this reason, it can be assumed that the ongoing buying pressure around current prices could generate enough momentum to invalidate the declining thesis.
If Fantom breaks its previous all-time high of $ 3.69, it will likely gain enough strength to continue towards $ 5.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.