FTXToken(FTT)hasseena14%priceincreaseinthepast24hours,makingitthetopgainerinthemarket.However,thissurgeisprimarilydrivenbyspeculativetradingratherthanaspecificincreaseindemandforFTT.
Thealtcoin’stechnicalsetuprevealsthatitmayshedsomeofthesegainsinthenearterm.Hereiswhy.
FTXTokenClimbsButNotDueToDemand
Whileitspricehasclimbedbydoubledigitsoverthepast24hours,FTT’snegativeChaikinMoneyFlow(CMF)hintsatapotentialpullback.Atpresstime,thisindicator,whichmeasuresanasset’smoneyflowintoandoutofthemarket,isat-0.26,formingabearishdivergencewithitsprice.
ThisdivergencebetweenFTT’srisingpriceandnegativeCMFsignalsthattheuptrendisunsustainable,suggestingthattherallyisdrivenbyspeculativetrading,notstrongmarketdemand.Thisscenariooftenprecedesanimpendingreversal.Ifthesellingpressureintensifies,thepricecouldcorrectdownwardoncetheupwardmomentumwanes.
FTTCMF.Source:TradingView
Furthermore,thesetupofFTT’sParabolicStopandReverse(SAR)indicatorconfirmsthisbearishoutlook.Atpresstime,thedotsofthisindicatorrestaboveFTT’sprice,reflectingtheoverallbearishsentimentthattrailsthealtcoin.
TheParabolic(SAR)indicatormeasuresanasset’strendsandidentifiesitspotentialpricereversalpoints.Whenitsdotsarelocatedabovetheprice,itindicatesabearishtrend.Thissuggeststhatthemarketisexperiencingdownwardmomentum,andtradersoftenconsiderthisasignaltosellortakeshortpositions.
FTTParabolicStopandReverse.Source:TradingView
FTTPricePrediction:ACorrectionIsMoreThanLikely
Asspeculativetradingsubsides,FTXToken’spricewilllikelycorrect,potentiallysheddingsomeofitsrecentgains.ItsFibonacciRetracementanalysissuggeststhatthealtcoincoulddroptothesupportlevelof$1.25.Ifthissupportfailstohold,wemayseeafurtherdeclinetowardthe$1mark.
FTTPriceAnalysis.Source:TradingView
However,thisbearishoutlookcouldbeoverturnedifFTTexperiencesasurgeinnewdemand.Insuchascenario,theassetcouldsustainitsupwardtrajectory,breakingthroughresistanceat$2.93andpossiblyclimbingtoashighas$3.53.
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