Matt Williams
Fantom has retraced 93% from $3.48 in October 2021 to $0.23 in May 2022 – is the FTM bottom in yet? Will Fantom go up in 2022?
What is Fantom?
Part of the Fantom drop was unrelated to the Fantom crypto project itself, which is a promising smart contracts platform with the aim to improve scalability issues and transaction costs that affect existing blockchain technology, and provide a better blockchain platform ‘for DeFi, crypto dApps, and enterprise applications’ according to the Fantom Foundation website.
The FTM crypto asset is its native token, with a circulating supply now of 2.55 billion FTM coins.
Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.
Why is Fantom Going Down?
Many crypto projects sold off when Bitcoin began its six month correction from $69,000 – hit in November 2021 shortly after the current Fantom all time high – to the $26,000 level in May 2022.
That month also marked the Terra (LUNA) crash which affected other DeFi projects and the entire crypto markets – which shows some signs of being over as LUNA is pumping off the lows.
Some specific reasons for Fantom going down were that Fantom developers Andre Cronje and Anton Nell left the project, which caused a drop in Fantom’s Total Value Locked (TVL) when the announcement was made. Fantom clarified that they weren’t core developers and the Fantom foundation would continue on.
Fantom also has its own algorithmic stablecoin fUSD and many of those projects and coins related to them went down in valuation during the Terra (LUNA) sell off as investor confidence in them declined.
Update – As of late May 2022 Andre Cronje’s wallet was tracked to have received 100 million FTM tokens from Binance and Andre was active on Github in relation to a fUSD version 2 commit. The FTM price pumped to the upside on speculation that he will return to the project, hitting $0.46.
The Fantom Foundation also clarified that the fUSD stablecoin is collateralized, backed by staked FTM.
FTM Price Prediction
One dollar was a key support level for the FTM token, that previously resulted in a large bounce to the upside for Fantom the last time it was retested. That was also around the 100% Fibonacci level of the current bearish price leg – $1.04, which the weekly candle wicked below then closed above.
Fantom Bottom is In?
It’s possible the bottom is in at $0.23 – $0.24 for Fantom, as Bitcoin put in a strong bounce in May from the $26,000 area (closer to $25,000 on some perpetual futures pairs) to reclaim the $30,000 level.
The 1.382 Fib level would be just above $0.15 which would also sweep the lows set in mid 2021 if a retest of that level does happen in 2022. A strong bounce would be expected from that area.
At some point the 1.272 Fib should be retested again from below, at $0.41. If the Fantom price can reclaim that level and the psychological price point of $0.50 a trading set up could be to buy and hold for the long term as a retest of $1 would also be likely for such a popular altcoin project with a large following compared to other DeFi coins.
The Fantom price prediction video above plots some Fibonacci extension levels to the upside, including price targets around the $4 – $5 area for 2023 or 2024.
Update – the Fantom price did reclaim that level, trading as high as $0.46 on rumours Andre Cronje will return to Fantom.
That youtuber posted an updated Fantom price prediction after the recent pump.
Fantom Bounce
After the May crypto crash several metaverse coins bounced the hardest, by double digit percentages – making sense as the metaverse and NFT ecosystem is in some ways considered separate to Bitcoin and the DeFi ecosystem, so the LUNA crash should have less impact on them.
One of the DeFi protocols that did also put in a strong bounce however was Fantom, trending on the eToro platform where it is listed alongside the above coins.
After the crypto dip (May 13th) – via eToro.com
That could suggest the macro bottom for Fantom has been printed and there is more upside potential from here than room to the downside. The FTM price did hit the $0.41 area after May 13th’s bounce, where it was rejected on the first attempt, showing the important of that 1.272 Fibonacci.
However the price of Fantom then found support at $0.30 and is holding stable.
The Fantom market cap today is still under $1 billion – currently $850 million, ranked #60 on Coinmarketcap – and FTM is oversold. A market cap of $1 billion and higher is standard in a bull market so if any positive news sentiment returns to crypto, that could increase at least 15-20% in the coming weeks and months.
Will Fantom Go Up in 2023?
Bull and bear cycles are standard in cryptocurrency and even if the crypto market trades sideways and has a reaccumulation cycle after the May dump, the next Bitcoin halving is in 2024.
The previous halving led to a bull run in the months following so Fantom by 2025 could be back near or above its top if BTC does break above $100,000 which some institutional investors predict. It could be a good investment to buy Fantom while the fear and greed index is currently low, then sell Fantom with layered take profit orders in the next bull market.
Another bullish case for Fantom is that 80% of the FTM total supply is already unlocked and in circulation, unlike many altcoins. Token unlocks usually lead to a coin price deflating – supply and demand. A lack of supply can result in a supply shock and a bullish rally, starting a new uptrend.
Outside of crypto, the DXY (the US Dollar Index) has been going up, causing the relative value of crypto coins to go down, and if that pulls back investor confidence in crypto and equities could return.
Bitcoin has been correlated to the stock markets (hitting a 17 month high for that correlation in Q1 2022) and the S&P 500 dropped below 4000 in May, before putting in a strong bounce to reclaim it on May 14th. The ‘sell in May and go away’ effect could be followed by a relief rally in June and July.
Crypto Price Predictions
- 5 Best Cryptos to Buy the Dip on in the May Crypto Crash
- DeFi Market Cap Predictions
- Why is LUNA Pumping
Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection.
This article was written for Business 2 Community by Matt Williams.
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