FTM has been bullish since August and has appreciated on-and-off in terms of value towards the end of this year.
Such positive momentum has helped pull the token higher in the market but has struggled against the market average determined by Ethereum.
This has resulted from the boom in decentralized finance, leading to higher inflation rates in fiat currencies, thus driving people to digital cryptocurrencies.
Fantom had been surging due to its demand, but the latest market downturn has not helped the token advance further.
What Is Fantom (FTM)?
According to the token’s own website, FTM is the primary token on the Fantom network, used to secure it through staking for governance, payments, and fees.
The network is secured through the proof-of-stake system, and in order to participate, validator nodes must hold a minimum of 3,175,000 FTM.
The network stays centralized as users buy and sell within the network.
The FTM token boasts a transfer speed of around a second, due to the network’s high throughput, fast finality, and low fees (transfers cost about $0.0000001).
Though cheap, low fees are an intelligent tool the Fantom network uses. Without a minimum barrier, “the network would be an easy target for spam, ultimately hampering the performance and filling the ledger with useless information.”
Fees may be cheap, but they are sufficient enough to make it expensive for anyone hoping to carry out any form of a malicious attack on the network.
In regards to governance, the network claims that FTM is required for on-chain governance. This is due to Fantom being a fully permission less and leaderless decentralized ecosystem, where any decision regarding the network is carried out internally.
With such a form of governance, stakers are able to propose and vote for any improvements or changes developers feel are necessary.
The token is required in order to participate in the voting process.
Supply Of FTM Tokens
The total supply of available FTM is reported to be 3.175 billion, with 2.1 billion currently in circulation. The rest has been placed in reserves for staking rewards.
The network states that its rewards remain at current levels; as per governance decisions, it will take over two years to distribute all the reward tokens and achieve a total supply circulation.
The total supply is distributed over multiple standards to promote easier trading. Currently, the FTM coin is available as a native mainnet token, an ERC-20 token, and a BEP-2 token.
The network discourages storing FTM tokens on exchanges, primarily due to custodial risks.
Users who do so may miss out on staking rewards.
The FTM Price Drop
Due to Bitcoin’s $50k reversal, Fantom took a significant price hit.
Over this past trading week, Bitcoin dropped almost $2000 from last Sunday’s high. Consequently, Fantom is down nearly 5% at $1.420 and is close to breaking down.
The FTM token has fallen almost 55% from its October all-time high, losing over $5 billion from the market cap.
One of the two main reasons for the token’s poor performance is that the cryptocurrency market as a whole has lost around $800 billion over November. Another reason is that rivals such as Terra are performing better than FTM, sucking its liquidity.
As a result, price action is poor and may potentially trigger long liquidation amidst a steep decline.
FTM Price Forecast
The daily market chart shows the FTM price hovering around the $1.400 support mark. Another dip will mark the lowest closing price since before the October high, encouraging users to sell their tokens.
In that case, a logical target for the network would be the same price at the September lows, which would be $0.9500.
The most significant long-term problem FTM currently faces is the lack of nearby resistance.
The sharp decline has caused the resistance level to be at the 100-Day Moving Average of $1.1988, meaning FTM could rally 30% in order to remain in this long-term downtrend.
Based on the information provided in InvestorsObserver, Fantom has currently been trading near its midpoint over the past five days. The token is 15.76% off its five-day high and is 9.01% higher than its five-day low of $1.35.
The price is trading near resistance. Its support has been set around $1.36, and resistance is at $1.49, meaning it could be facing pressure to sell very soon.
Today’s volume is below its average volume over the past seven days, which indicates that the FTM token is struggling more than it did before. Asset loss has been at over 0.2% since September.
On the flip side, the token may be able to hit support levels in the near future. The coin price has seen a rise of 1.5% in the intraday session.
Provided the asset cost moves 35% from the current level, it may reach a yet-untouched high.
FTM presently has an ROI of over 18829%, which has been a sign of hope for retail and institutional financial backers.
It is seeing a negative pattern that may push the cost to a lower level, but despite this, it has been estimated that FTM cost may experience a solid rise.
Bridges are a means of establishing a secure connection between different blockchains and permit the transfer of data and tokens.
Most work on a mint-and-burn protocol, where when a token is bridged from one chain to another, it is locked in the first chain, and a fresh one is minted in another.
When the holder of the minted token wants the original, the second minted token is burned, and the original is released. This keeps the amount and cost of transferred tokens level.
Bridging tokens along the Fantom network may be its saving grace. The speedy transfers make minting easier for users, boosting Fantom’s market value.