- Fantom prices are moving inside a falling wedge pattern with a 712% price target.
- However, macro cues suggest FTM might fail to realize the pattern.
NEW DELHI (CoinChapter.com) — Fantom (FTM) prices could grow by more than 700% in Q3/2022, owing to a technically bullish pattern.
In detail, FTM has been moving inside a falling wedge pattern. Two converging trendlines with a negative slope connecting swing highs and swing lows form the descending pattern. Prices bounce between the converging trendlines until the asset breaks out. Meanwhile, high trading volumes confirm the breakout.
The upside target for the breakout is equal to the maximum distance between the falling wedge’s upper and lower trendlines. FTM has a price target of nearly $2.79, a jump of more than 700% from its current price level.
However, Tom Bulkowski, a veteran investor, believes the falling wedge is a poor performer in bullish chart patterns. As per his research, an asset meets its breakout price target in only 62% of the cases.
He highlighted that a downward breakout from a falling wedge in a bear market is more reliable. Therefore, it is more likely that FTM prices break below the falling wedge, invalidating the pattern.
FTM Price Chart
Fantom prices fell more than 42% on May 11, during the crypto market’s hell week sell-off, which saw the crypto market cap shrink by nearly $900 billion. FTM has since been trading laterally between $0.29 and $0.4.
If FTM fails to start an uptrend, prices could fall to immediate support near $0.32. Further downtrend might see FTM prices fall to $0.27, which arrested FTM’s recent downtrend last week. Finally, a marketwide sell-off could push Fantom prices to $0.23.
Meanwhile, the FTM token remains inside the trendlines of the Bollinger Bands indicator.
In detail, Bollinger bands consist of a simple moving average (middle band) and an upper and lower band. The two bands are usually two standard deviations from the middle band. A move above or below the bands indicates overbought or oversold conditions.
On the other hand, Fantom’s relative strength index remains in the oversold regions. The FTM token moved below 30, the oversold threshold, on May 9. RSI measures the magnitude of recent price changes to analyze overbought or oversold conditions.
An oversold RSI indicates a bullish trend reversal is on the cards. With FTM prices at oversold levels, investors who rely on RSI would likely move in to buy the dip and trigger a rally.
If bulls move to buy the dip, FTM prices might rise to challenge immediate resistance near $0.42. Once FTM prices move and consolidate above immediate resistance would help Fantom move to challenge resistance near its 20-day moving average (red wave, 20-day M.A.) at $0.53.
Finally, a sustained uptrend might help Fantom prices rise to $0.67 before correction pull back prices.
Macro Cues Bearish
All major cryptocurrencies fell last week following the collapse of Terra’s UST stablecoin and LUNA tokens. The fallout of the crash pushed Bitcoin (BTC) prices to $27,000 last Thursday, its lowest since Dec 2020.
Furthermore, the FED’s interest hike decisions, which raised its lending rate in March and again this month by half a percentage point, also hurt investor confidence. The hike was FED’s biggest in nearly two decades.
Federal Reserve Bank of Cleveland President Loretta Mester, a voting member of the FOMC, hinted in an interview with Nikkei that a 0.75 percentage point hike in interest rates might be in the cards later this year.
We don’t see inflation coming down fast enough. And we’ll want to keep every option on the table, including 75. Come [the Fed meeting in] September, it could be that the economy evolves […] we have to be open to the fact that we could see demand and supply imbalances actually doing better than we anticipate. […] I don’t rule out 75 in the future.Loretta Mester said
In addition, the U.S. and Europe’s response to the situation in Europe, combined with the FED rate hikes, have caused a lot of uncertainty in the markets. As a result, FTM’s likelihood of breaking out of the falling wedge seems unlikely since experts believe the market is still inside a correction phase.
At the time of writing, FTM was trading at $0.332, down 7.3% on the day.