FTX Token (FTT) appears to have completed a correction and is currently nearing the $53.80-$60 resistance area. The uptrend has been started by a strong bullish signal.

Breakout of the descending resistance line

FTT has been in a downtrend since hitting an all-time high of $85.74 on September 9th. It has traded below a descending resistance line throughout the decline. So far, the FTT has hit a local low of $33.76 on Jan. 8th.

From this low, the FTT rallied and initiated an upward move that served to confirm the $36 area as support. This is a critical area that previously acted as a resistance.

On Jan 14th, FTT broke out above the descending resistance line mentioned above. Before the eruption, this line existed for 127 days.

The next resistance is between $53.80 and $60. This resistance area is created by the 0.382-0.5 Fib retracement resistance levels.

 Source: TradingView

Bullish divergence

Technical indicators are currently supporting the continuation of the uptrend. This is particularly evident in the daily MACD.

The MACD signal line generated bullish divergence (green line) between December 2021 and January 2022. The last time the signal line generated this divergence was mid-April and May 2020, it was a significant bearish divergence (red line) and the price declined sharply thereafter.

Since the current divergence is bullish, a similarly strong move higher is possible during this period.

Source: TradingView

The two-hour chart also shows that the FTT has broken above the descending resistance line. It is currently trading in the last short-term resistance area, just above $47.

Similar to the daily timeframe, the uptrend is supported by the MACD, which has almost entered positive territory.

Source: TradingView

Count waves

Trader @Altstreetbet tweeted an FTT chart and said it looks like the FTT has completed a corrective phase and could rally around $60 before the next resistance.

The source: Twitter

Measured from the all-time high on September 9th is the number of waves most likely to indicate that the move to the January 8th low (highlighted) is a corrective structure. Where the A:C wave has an exact 1:1 ratio, which is very common in such structures.

Also, wave C is clearly a five-wave bearish impulse (red), which is a necessary condition for the correction to complete.

While a rally towards the $53-$59 zone is very likely, the shape of the current bullish move will help determine the direction of the future trend.

Source: TradingView

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.

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