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Fantom lost ground by 18% in February. On-chain data suggests FTM could still be overvalued around current prices. With FTM holders now moving tokens onto exchanges, is there a chance for this altcoin to decline further in the coming weeks?
Fantom is a directed acyclic graph (DAG) smart-contract platform designed to rival Ethereum in hosting decentralized finance (DeFi) services to crypto investors.
Fantom Remains Overvalued Despite Recent Downswing
FTM holders endured a turbulent February amid a sharp 18% decline. The native token of the 8th-largest DeFi network by total value locked has not shown signs of a resurgence in the first week of March.
According to cryptocurrency data analytics firm, Santiment, the Network Value to Transaction (NVT) Ratio spike indicates FTM price may decline in the coming weeks.
The graph above shows relative to price, the FTM NVT ratio has been trending upward since mid-February. This means the FTM token is becoming increasingly overbought. The NVT ratio describes the relationship between market cap and transaction volumes. And rising values often signal impending sell action.
Holders Are Positioning for Sell Action
Notably, another on-chain trend that could culminate in a bearish FTM performance in March is the influx of tokens on exchanges.
Blockchain data compiled by IntoTheBlock indicates FTM holders may be positioning for sell action in the coming weeks. The netflow of FTM across prominent exchanges has increased over the past week.
Since March 3, approximately 8.7 million FTM tokens have moved into top exchanges.
Typically, when the netflow rises, it is a bearish signal which suggests that a large volume of FTM is now available on exchanges to fulfill short-term sell orders or create new ones.
FTM Price Prediction: When Bottom?
IntoTheBlock’s Exchange Market Depth chart provides a>
Conversely, the 13.8 million FTM sell-wall on the road to $0.46 poses strong resistance to any major price rally. But, if FTM scales this obstacle, the 20 million FTM sell orders at the $50 price level could be the next resistance to beat.