- The FET remained flat in October, but the bulls caused rates to consolidate.
- Now it’s primed for an outbreak if the right conditions arise.
The market was buzzing with post-election hype as investors diversified to limit risks. This has driven Bitcoin[BTC] to a new all-time high of $77,000. AI tokens also reaped rewards, posting impressive weekly gains, with many seeing double-digit increases.
However, Artificial Superintelligence Alliance [FET] remained consolidated despite a 15% gain this week. At the time of writing, it was trading at $1.42, still below the $2 target.
Typically, a bull rally like the current one would position FET for a breakout from the four-month slump. However, its lagging performance has caught the attention of AMBCrypto.
Is FET ready for a rebound?
Interestingly, the FET has been on a downward trend since October. Despite Bitcoin’s 5% rise, which closed the month around $72,000, it had little to no impact on FET’s price movement.
One factor that has contributed to this is the memecoin-led ‘supercycle’, which has seen heavy liquidity flow into meme-based tokens. For example, DOGE posted an impressive daily gain of 11%.
Unlike previous cycles, this one is characterized by a more balanced capital allocation. Small-cap tokens are also showing double-digit gains, a trend that FET bulls may want to capitalize on, according to data from CoinMarketCap.
Since mid-June, FET bulls have made four attempts to break the $0.17 resistance, entering an accumulation phase, as shown by on-chain data.
About a month ago, investors withdrew about $11 million worth of FET tokens from the exchanges. This helped keep the FET in a stable range and mitigate potential pullbacks.
However, despite these aggressive buyouts, the expected impact on FET’s price has yet to materialize – pointing to a possible thirdparty influence that can counteract the bullish momentum.
A short bias could derail the rally
In addition to inconsistent order book activity from large investors, FET’s breakthrough largely depends on the derivatives market, where there is a clear bias towards shorts.
Since October, short sellers have dominated the FET futures market, acting as a major source of resistance.
There’s a twist, though: a large number of short positions could quickly reverse if market momentum turns against them. And there is no better time than now.
As previously mentioned, investors were diversifying their portfolios, with many focusing on small-cap tokens. This trend is notable, especially as BTC approaches a risk zone.
Read the Artificial Superintelligence Alliance’s [FET] Price forecast 2024–2025
While spot traders targeting the dip is a bullish sign, it may not be enough to trigger a breakout. For that to happen, large holders must avoid losing their positions.
As a result, strong buying interest could trigger a short squeeze and pave the way for a bullish recovery.
In other words, FET has the right ingredients for a potential breakout. With the RSI in a neutral phase, a few conditions could push the FET above its resistance at $0.17 and put it on course towards a $2 target.