Fantom’s recent price recovery of nearly 28% has not fully restored investor confidence in the cryptocurrency. Despite the improvement, the price has not yet recovered 50% of its previous losses, suggesting some weakness in the trend. However, analysts are optimistic about a potential recovery in the future due to improvements in on-chain metrics, specifically the decrease in price-DAA divergence.
The price-DAA divergence indicator measures the difference between the price and daily active addresses. A decreasing divergence from the bearish side signifies an improvement in the price, while an increasing divergence indicates the opposite. An increase in daily active addresses indicates more user engagement, which can have a positive impact on the price.
Despite the recent recovery, Fantom is still considered to be in a risky zone according to the Fibonacci retracement tool. The price has not invalidated the 50% area or “golden zone,” which lies at the $0.41 level. Currently, Fantom is hovering around 38% of the Fibonacci tool at $0.37. If the price remains stagnant and bearish pressure increases, it could potentially decline to new lows. On the other hand, if Fantom continues to rise, it may surpass $0.41 and indicate a broader recovery.
Overall, the technical indicators suggest a bearish trend for Fantom. While there has been a recovery in price and a decrease in price-DAA divergence, investor confidence has not fully returned. The risk of further declines remains, particularly if the price fails to surpass the golden zone.