Hidden Divergences Could Precede Upward Movement for FTX Token (FTT)

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FTX Token (FTT) has been increas­ing since Jan 24 and is show­ing sev­er­al bull­ish signs. How­ev­er, there is a stark con­trast between the price action and tech­ni­cal indi­ca­tor readings.

FTT has been falling since reach­ing an all-time high price of $87.3 on Sept 7. How­ev­er, the decrease stopped once FTT bounced at the $35 hor­i­zon­tal sup­port area on Jan 24. 

Despite the bounce, tech­ni­cal indi­ca­tors are show­ing mixed signs. On the bull­ish side, both the RSI and MACD have gen­er­at­ed very sig­nif­i­cant hid­den bull­ish diver­gences (green line). Such diver­gences are a strong sign of trend con­tin­u­a­tion. Since the under­ly­ing trend is bull­ish, a con­tin­u­a­tion of this upward move­ment would be likely. 

How­ev­er, both indi­ca­tors are still decreas­ing, which is a bear­ish sign.

Cryp­tocur­ren­cy trad­er @CryptoPoseidonn tweet­ed a chart of FTT, stat­ing that if the price man­ages to move above $63, a new all-time high would be expected.

Due to the mixed read­ings from the week­ly time-frame, a look at low­er time-frames is required in order to deter­mine if FTT will indeed increase towards a new all-time high.

FTT breaks out

The dai­ly chart shows that FTT has bro­ken out from a descend­ing resis­tance line that had been in place since the afore­men­tioned all-time high. 

After­wards, it val­i­dat­ed this line as sup­port on Feb 24 (green icon). The price has been mov­ing upwards since.

How­ev­er, the dai­ly time-frame also fails to con­firm the direc­tion of the trend, since tech­ni­cal indi­ca­tors and the price action give con­trast­ing readings. 

While the FTT price action is bull­ish, tech­ni­cal indi­ca­tors are bear­ish. Both the RSI and MACD are decreas­ing, the for­mer being below 50 while the lat­ter negative. 

How­ev­er, both indi­ca­tors are very close to their respec­tive bull­ish thresh­olds. There­fore, a slight price increase would cause both of them to turn bullish.

If the upward move­ment con­tin­ues, the main resis­tance area would be between $59.5 and $66.2, cre­at­ed by the 0.5–0.618 Fib retrace­ment resis­tance levels.

The six-hour time-frame shows that FTT is trad­ing inside a descend­ing par­al­lel chan­nel. This is usu­al­ly a cor­rec­tive pat­tern, mean­ing that a break­out from it would be the most like­ly scenario. 

How­ev­er, sim­i­lar­ly to both the week­ly and dai­ly time-frame, tech­ni­cal indi­ca­tors are neutral/bearish, pro­vid­ing some ambi­gu­i­ty as to the direc­tion of the trend.

Wave count analysis

Final­ly, the wave count sup­ports the pos­si­bil­i­ty that the price will increase. The FTT price decrease resem­bles an A‑B-C cor­rec­tive struc­ture, in which waves A:C had a near­ly 1:1 ratio.

Also, the over­lap between the Feb 2022 high and Sept 2021 lows (red line) sug­gests that the decrease was corrective.

For BeInCrypto’s lat­est Bit­coin (BTC) analy­sis, click here

Disclaimer

All the infor­ma­tion con­tained on our web­site is pub­lished in good faith and for gen­er­al infor­ma­tion pur­pos­es only. Any action the read­er takes upon the infor­ma­tion found on our web­site is strict­ly at their own risk.



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