Disclaimer: The following analysis is the sole opinion of the writer and should not be considered investment advice
Fantom was strongly bullish on the hourly chart as it climbed above the critical level at $2.75 and roamed supply-to-demand. The $3.15 zone marks the local top and the Fantom bulls have their eyes on the profit-taking target levels of $3.15 and $3.44.
A pullback for Bitcoin could cause FTM to drop. But, as long as Bitcoin can sustain above $42.5k, Fantom seems poised to perform well in the coming days.
FTM- 1-hour chart
Source: FTM/USDT on TradingView
Two sets of Fibonacci levels have been plotted. One is based on the FTM rally from $1.30 to $2.44 (in white) and the 61.8% extension of this move marked a local high for FTM. The other is based on the retracement from $3.15 to $2.10 (yellow). The $2.75 area has a confluence from both sets of Fib levels and also represents an area of liquidity.
Recently, FTM broke through this area, found some resistance at $2.92 and formed a higher low. This is a strong bullish development on the hourly chart.
The $2.92-$3 area has seen an increased supply for FTM and the price could extend a few more hours below this area before sellers dry up. If that happens, the FTM is likely to break out of $3, retest the support, and rally to $3.15. Above $3.15, $3.44 represents a 27.2% expansion and take profit.
Not just $3.44, a 27.2% expansion, but also a price double at the end of October. So that means sellers are likely to do the same thing again if FTM climb that high.
Theoretical basis
Source: FTM/USDT on TradingView
OBV has been up for the past few days as FTM sees strong demand in the $2.20 area. This demand could push FTM higher as it is trading above the critical $2.75 level.
The Supertrend indicator continues to give a “buy” signal while the Stochastic RSI is forming a bullish crossover in the oversold zone. On the lower timeframes, this combination usually means strong short-term bullish strength.
Inference
Indicators suggest that FTM is likely to rise further, while the price chart marks the $3, $3.15 and $3.44 levels as places where the price could encounter some resistance on the way up. As for support, the $2.75 area, if revisited, will likely provide a good risk-to-reward area to buy Fantom.