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- The future of the FTT and its price action would be heavily dependent on the reopening of the FTX exchange.
- Technical and on-chain metrics were compelling for the bullish situation, but investors should be cautious.
FTX token [FTT] saw huge gains this past week. On November 6, the FTT was trading at $1.1195. News that Gary Gensler, chairman of the U.S. Securities and Exchange Commission, was open to the idea of one FTX restarted exchange saw the token rise higher.
On November 10, the FTT peaked at $5.53, a move of 394% in a week. In the last four days, the price has fallen to $3. Was this a temporary move or has the long-term downward trend been broken?
The lack of overhead resistance could allow the FTT to take off
Source: FTT/USDT on TradingView
The implosion of the FTX stock exchanges was accompanied by a free fall of FTT prices. For the past year the price has remained around $1 as the company has been bankrupt all this time, but recent events saw a jump to $5.
Although we can say that the market structure was bullish, a critical resistance level of $4.41 has not yet been breached.
A series of Fibonacci retracement and extension levels (light yellow) were plotted based on the recent rise. In addition, the resistance levels of December 2020 and February 2021 have also been plotted.
In the north these were the levels to watch out for. In particular, the $8.2, $9.86, $10.84 and $15.54 levels could stop a rally in the coming months.
Such a strong move would require a huge demand, which would occur if more positive news developments occurred. As things stand, a retest of the $2.13-$2.86 region presented a buying opportunity from a technical perspective.
Measure how risky this buying opportunity can be
Source: Santiment
Weighted sentiment shot to a high not seen in more than a year, as did the MVRV ratio. This meant that long-term holders would likely be keen to liquidate some of their holdings to book profits.
This in turn could force a deeper pullback or even a downtrend.
Read FTX Tokens [FTT] Price prediction 2023-24
Supply on the exchanges also jumped to a high not seen since March, signaling impending selling pressure.
Therefore, buyers should only bet on what they can afford to lose. A drop below $2.13 would negate the idea that the rally could go any higher.