As per technical data, the FTM market has turned overbought after rallying 230% in five weeks, with the coin’s momentum slowing down compared to the price boom.
FTM price rallies 230% after Cronje’s 2023 roadmap
FTM’s price has grown by 230% in the past five weeks, trading at $0.61 on Feb. 5. The rally came as a part of a broader crypto market recovery but outperformed most top-ranking crypto assets due to the hype created by Andre Cronje.
Cronje is the co-founder and architect of Fantom’s layer-1 blockchain. On Dec. 26, 2022, the developer released a letter discussing the goals and priorities for the Fantom ecosystem in 2023, including his intention to allow decentralized app developers to earn 15% of the network’s revenue.
The FTM price has seen five weeks of gains in a row since Cronje’s letter to the Fantom Foundation team.
The FTM/USD pair looks ready to close the week ending Feb. 5 with at least a 25% profit, helped by Cronje’s latest Twitter thread that gives 13 reasons why Fantom will be one of the best layer-1 blockchains in 2023.
Fantom price technicals hint at correction ahead
Nevertheless, FTM’s ongoing rally risks exhaustion due to a growing bearish divergence between its rising price and falling momentum.
On the daily chart, FTM/USD has formed higher highs since mid-January, while its relative strength index (RSI) has made lower highs. As a rule of technical analysis, such a discrepancy means that the upside momentum is slowing.
In addition, the RSI remains above 70, suggesting FTM is “overbought.“ It also hints about short-term bullish exhaustion and possible sideways or downward price action in the coming days.
FTM risks crashing toward $0.42, or 35% from current price levels, given the level’s recent history as resistance. Moreover, a close below $0.42 would bring FTM’s 200-day exponential moving average (200-day EMA; the blue wave) at $0.38 into view as the next downside target.
Overall, Fantom maintains its bullish bias as long as it remains above its 200-day EMA and the 50-day EMA (the red wave).
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Source : Cointelegraph.com