The Fantom (FTM) price is trading inside an important horizontal support area, potentially getting ready to validate it as support.
Despite the considerable fall last week, the bullish price action and wave count still remain intact. Will these allow for the price to resume its upward movement, or will a breakdown ensue?
Fantom Trades at Crucial Long-Term Support Level
In January, the FTM price broke out from the $0.40 horizontal resistance area. It reached a new yearly high of $0.66 the next month. Even though the price has fallen since, it still trades inside the area, which is now acting as support.
Whenever a horizontal resistance level gets broken, it is a common occurrence that it provides support on the way down.
The weekly Relative Strength Index (RSI) also give a similar reading. By using the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset.
Bulls have an advantage if the RSI reading is above 50 and the trend is upward, but the opposite is true if the reading is below 50. The RSI is currently testing the 50 levels as support. So, if the price and RSI bounce, it would mean that the trend is bullish.
If a bounce follows, FTM could increase to the next resistance at an average price of $1.10. However, a drop to the $0.25 horizontal support area could transpire if it breaks down.
FTM Price Prediction – Will Pump Follow?
Based on technical analysis of the daily time frame, the FTM price prediction is bullish due to price action and the Elliot Wave theory wave count. Elliot Wave theory is a tool technical analysts use to identify recurring long-term price patterns and investor psychology to determine the trend direction.
The current price appears to be in the fifth and final wave of an upward movement (white). The sub-wave count is given in black, suggesting that the FTM token is corrected inside sub-wave two.
If the count is correct, the two most likely targets to act as the top will be at $0.80 and $1.10. These two price levels are determined using the Fibonacci retracement levels, which suggest that after a big price move in one direction, the price will retrace or return part of the way back to a previous price level before continuing in the original direction.
For the first one, the length of waves one and three are projected to the bottom of wave four. For the second one, the 1.61 length of the same waves are projected at the same bottom.
Despite the bullish count for the digital asset, decreasing below the wave four low (red line) at $0.30 will invalidate the bullish FTM price prediction. In that case, the future price could decrease toward $0.20.
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