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Despite recovering nearly 28% in the last seven sessions, the investors still do not seem to be confident in Fantom. Earlier, Fantom price lost traction and crashed below the annual lows, losing nearly 47% in the third week of July.
The recent sessions displayed a recovery. However, as per the Fibonacci tool, he FTM price still has not been able to recover 50% of the losses, indicating weakness in the trend.
However, some analysts anticipatea recovery in the forthcoming sessions after the improvement in on-chain metrics (price DAA divergence).
Let’s analyze and try to get a clear picture of where Fantom may go from here. Can it continue to inch higher or will it fall again towards the annual lows?
Fantom DAA Divergence Analysis
Along with a steady price recovery, a notable shift in FTM price DAA (Daily Active Address) divergence was observed. As per analysts, the divergence in the price and daily active addresses was decreasing, indicating an improvement in the overall trend.
The price-DAA divergence indicator measures the change in divergence between the price and daily active address. A decreasing divergence from the bearish side indicates an improvement in the price and vice versa.
The DAA reflects the total number of users that have engaged in any transaction in a day. A rise in the number of active addresses indicates increasing user engagement, leading to a positive impact on the price.
Fantom Price in a Risky Zone as per Fibonacci
Since last week, Fantom has recovered nearly 28% from the lows. However, the recovery is still not enough as the price hasn’t invalidated the golden zone of the Fibonacci retracement tool.
While applying Fibonacci from the recent swing high at $0.549 to the recent swing low at $0.29, the 50% area or golden zone lies at $0.41 level. As of now, FTM is hovering near $0.37 which is 38% of the Fibonacci tool.
If the price stays flat and the bearish pressure rises, it could slide down to new lows. On the contrary, if Fantom continues to rise, the bulls may surpass $0.41 marking a recovery.
The technical indicators are giving bearish signs. Fantom has recovered nearly 28% in the last seven sessions but still lacks investor confidence after a 47% crash in the later weeks of July.
The price recovery was accompanied by a reduction in the divergence between price and daily active addresses, indicating an improving trend.
Notably, the recovery hasn’t invalidated the golden zone of the Fibonacci retracement tool yet. The price is hovering near $0.37, below the $0.41 level. $0.41 must be crossed to confirm the recovery phase.
If the bearish pressure persists, the price may slide to new lows. Overall, the technical indicators suggest a bearish trend.