Is a Price Correction Looming?

• Analysts warned that FTM’s $0.50 resistance could trigger a bull trap, with a correction to $0.465 likely.
• Rising Open Interest and whale activity signaled growing bullish momentum, but caution remained at $0.50.

Fantom [FTM] has experienced a significant rise recently, but analysts issued warnings as the token neared a key resistance level.

Trading at $0.4874 at press time, FTM has seen a slight -0.76% dip in the last 24 hours while recording a 25.29% increase over the past week. Its market cap stood at $1.36 billion, with 2.8 billion FTM in circulation.

Crypto analyst @CryptoJobs3 has expressed concerns about a potential bull trap as FTM approaches the $0.50–$0.5050 range. 

Citing a bearish divergence on the RSI, the analyst stated, 

“A correction is possible; the price could revisit the $0.470–$0.4650 range.”

A breakout beyond $0.50 might push the price toward $0.5200, but the analyst remained cautious about entering long positions at current levels.

Bullish momentum with caution

Several key technical indicators pointed to short-term bullish momentum, but overbought conditions could lead to a pullback.

The Bollinger Bands showed that the price was near the upper band, signaling potential overbought conditions. 

The tight bands indicated low volatility, suggesting that a breakout may be imminent.

Source: TradingView

The MACD showed a bullish crossover, with the MACD line above the signal line and positive histogram bars. This suggested growing bullish momentum, though the trend is still in its early stages. 

Meanwhile, volume remains low, which indicated weak conviction behind the recent price increase.

Analysts suggested that a breakout above $0.50, accompanied by rising volume, would confirm a bullish trend, but failure to breach this level could lead to a pullback.

Fantom: Heightened market activity?

The FTM Futures Open Interest chart revealed a notable increase in open interest, which has risen to $174.85 million as of the 11th of September.

This increase in Open Interest corresponded with FTM’s price moving toward the $0.50 mark, reflecting increased trader participation and speculative activity.

Source: Coinglass

For several months, Open Interest fluctuated between $100 million and $200 million, indicating limited trading activity.

The recent rise in both price and Open Interest could signal growing confidence in FTM’s future price movement, but it also suggested the potential for increased volatility.

FTM’s Total Liquidations chart showed that as of the 11th of September, $141.51K in long positions were liquidated compared to $10.28K in short positions. Binance saw the majority of long liquidations at $88.86K. 

Source: Coinglass

This wave of liquidations indicated that many traders were caught off guard by the recent price fluctuations, especially as the price neared $0.4864.

The liquidation data suggested that long traders, in particular, were overly optimistic about FTM’s continued rise, resulting in liquidations when the price failed to break higher.

The ongoing uncertainty around the $0.50 resistance level meant that traders remain cautious.

Increased buying pressure

A recent report by AMBCrypto pointed to rising buying pressure. FTM’s supply on exchanges has decreased, while its supply outside of exchanges has increased.

This trend suggested that holders were moving their assets off exchanges, typically a sign of long-term confidence in the asset.

Read Fantom’s [FTM] Price Prediction 2024–2025

Additionally, whale activity around FTM has risen, as indicated by a spike in large transactions. This increase in whale movement and exchange outflows likely contributed to FTM’s recent bullish momentum. 

However, traders remain wary of a potential bull trap near the current price level.