The FTX Token (FTT) has surged by more than 30% over the past few days, raising concerns about the possibility of a major crash. After an impressive 10-day high that saw prices double, this sudden drop was driven by recent gains by traders.
From September 29 to October 8, FTX tokens increased from $1.40 to $2.80, representing an increase of 100%. However, by October 10, the price dropped to $2.24, and within an hour the token fell another 1% to $2.24. The 24-hour trading volume is still above $60.42 million, which indicates active trading during this volatile period.
This sharp downward fall was caused as investors began to sell off after the token reached a key resistance at $2.7. Many traders recorded gains following the announcement of recent payment plans from FTX lenders, which initially drove the token up sharply and consequently sent the token’s price down sharply.
Technically, the FTX token’s price is moving into a flag pattern, usually a signal of continued price movement, either bullish or bearish. Here we have a strong upside movement followed by correction now if the price holds support at $2.25 and moves up again we may see a bullish momentum with $2.7 as key resistance to breach.
The Relative Strength Index (RSI) has fallen from overbought levels, indicating a shift to neutral territory.
Also, the simple moving average (SMA) is approaching a bearish crossover, which conversely could indicate further losses ahead before any reversal.
Despite a recent dip, the FTX token still boasts a 6% increase over the past week and a 74% gain over the past month. However, the question remains: Will the FTT recover? If bullish sentiment returns, the token could retest resistance at $2.65 and reach $3.25. Worse, continuing the sell-off could push the token towards critical support at $2.10.
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