Fantom (FTM) price is in the midst of forming a bullish pattern but despite the rally, it is observing bearish signals.
Can the altcoin fight this sentiment and carry on with its potential 102% increase, or will it face a 31% correction soon?
Fantom price has maintained its presence above the $1 mark since the beginning of this week. Considering the historical movement, it seems like the altcoin will likely continue this rally, but broader market cues suggest the opposite.
The surge in deposits on the network is a concerning development among FTM holders. This metric highlights the shift of tokens from investors’ wallets to exchange wallets. A spike in active deposits means that investors are preparing to potentially sell their holdings for profits or to offset losses.
In the case of Fantom, it is the former. Additionally, the correlation of the altcoin is rather high, with Bitcoin at 0.86. High correlations suggest that the direction of the larger asset will impact that of the smaller one. Thus Fantom price could end up following the bearish cues of Bitcoin, which is currently in a decline.
If the bearish cues bear an impact on the cryptocurrency, the Fantom price could see a 31% correction going ahead. This is based on the Parabolic Curve pattern forming on the daily chart at the moment.
This bullish pattern is confirmed when an asset forms three bases on the curve, with the third base generally triggering a rally. This rise can result in growth, which could double the price of the asset in a very short time.
Consequently, the target price is set at $1.61 for FTM. However, when corrections arrive, the asset could end up falling back to the support level established at base 3. However, since bearish cues are rising, if the Fantom price corrects now, it could note a 31% correction, falling to the base 3 level. It would end up testing the support range of $0.80 and $0.88.
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However, if Fantom’s price does not fall through the support line at $1.03, the bearish thesis could be invalidated. A bounce-off from this point would bring FTM back to test the support at $1.11.