Key Points to Note
Reasons behind FET’s Decline this Week
The drop in FET’s price this week was influenced by overbought signals and a significant $13 million decrease in Open Interest, leading to outflows and profit-taking.
Indicators Pointing Towards a Potential Recovery
Despite the recent decline, there are signs of a possible rebound ahead, including spot inflows totaling $6.5 million, RSI hovering around 48, and a bullish crossover on the MACD.
The Artificial Superintelligence Alliance, also known as FET, experienced a sharp 14% decline over six days due to a wave of outflows, maintaining a bearish market sentiment with a 40% decrease in monthly outflows.
The recent pullback, although causing a notable drop in investments, could be viewed as a corrective move. Here is a breakdown of AMBCrypto’s analysis.
Overbought Conditions Contributing to FET’s Drop
Analysis revealed that FET’s price decline was triggered by entering overbought territory and a surge in liquidity outflows.
The Bollinger Bands chart displayed FET trading within the overbought zone, characterized by crossing above the green line, historically a strong liquidity barrier where substantial sell orders tend to cluster.
Source: TradingView
Intensified outflows from the Derivatives market further fueled the decline, with a sharp drop in open interest over the last 24 hours.
Data from CoinGlass indicated that over $13.2 million in contract positions were closed, including $1.4 million from liquidations.
Ideally, the price was moving towards the middle Bollinger Band at $0.2588, potentially offering support and enabling a rebound.
If this level fails to hold, FET could slide towards the lower band at $0.1837, historically a key support level.
The data suggests that the decline may be corrective, with a potential rally on the horizon.
Short-Term Corrective Phase
This phase could be a brief correction, as market sentiment indicates a rapid return of liquidity to the market.
Spot Exchange NetFlow data from CoinGlass revealed that despite the price decline, spot investors spent over $6.5 million acquiring FET within two days, hinting at potential buying activity in the upcoming week.
Source: CoinGlass
While Open Interest decreased by $13 million, the Funding Rate rose to 0.0083%, indicating that long traders continued to pay shorts, signaling confidence in a rebound.
Momentum Slow but Bulls Showing Signs of Revival
Technical indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest that selling pressure is waning.
The RSI slightly dipped below 50, indicating weakened buying momentum, but the upward trend on the MACD suggests ongoing bullish sentiment, possibly indicating a recovery.
Source: TradingView
If the RSI reverses upward and the MACD continues its positive trend, FET could be poised for a rebound.
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