In the past month alone, FTX Token [FTT] has surged 61.43%, with such significant gains in such a short period of time not common in the current market.

This bullish momentum has only just begun, which means FTT could be gearing up for another massive price increase, as discussed below.

Demand zones will drive impulse buying

At press time, FTT was trading in the demand zone, a price range known for attracting significant buying pressure and catalyzing uptrends, as seen twice before.

This demand area ranges from $1.9305 to $1.7289. Recently, FTT showed respect for this level, which resulted in a 15.36% increase in price.

If the buying momentum continues, FTT may target the overhead resistance at $3.4343. However, traders should watch out for potential minor resistance at $2.3330, just above the current price.

Active buyers push FTT higher

Further analysis from AMBCrypto shows that traders are actively buying FTT, which could drive its price higher as Coinglass sentiment improves on key metrics such as funding rates and open interest.

Currently, the funding rate is positive at 0.0449%. The funding rate is positive when the price of a cryptocurrency futures contract exceeds its spot price.

In this case, long traders (those betting on rising prices) pay short traders, indicating bullish sentiment around FTT.

Contributing to this optimism is the growing open interest, which increased by 2.69% to $1.1 million. This suggests that more long contracts are being opened and existing positions are being maintained.

Despite the bearish market, traders are actively financing FTT purchases, so a significant rally seems imminent.

Despite the optimistic outlook, caution is warranted

Despite its recent double-digit price gains, FTT’s negative Chaikin Money Flow (CMF) hints at a possible pullback. At press time, the indicator, which measures the amount of money flowing into and out of an asset’s market, stood at -0.26, forming a bearish divergence with its price.

The divergence between the rising FTT price and the negative CMF value indicates that the upward trend is unsustainable, indicating that the rise is driven by speculative trading rather than strong market demand. This situation usually indicates that a reversal is imminent. If the selling pressure intensifies, the price may correct downward once the upward momentum weakens.

Furthermore, the setup of FTT’s parabolic stop and reverse (SAR) indicator also confirms this bearish outlook. At press time, the indicator’s dots are above FTT’s price, reflecting the overall bearish sentiment for lagging altcoins.

The Parabolic SAR indicator measures the trend of an asset and identifies its potential price reversal points. When its dots are above the price, it indicates a bearish trend. This indicates that the market is experiencing downward momentum, which traders often see as a signal to sell or go short.

At the same time, it is crucial that we also remain cautious as the Accumulation/Distribution (A/D) indicator approaches a significant resistance trendline.

If the price rises to this level, which could coincide with the previously mentioned minor resistance at $2.3330, FTT could decline slightly to the support at $2.0486 before resuming its upward trajectory.

However, the sentiment must remain bullish for the $2.0486 support to hold.

FTT Price Prediction: A Correction Is Very Likely

As speculative trading subsides, the price of FTX Token may pull back, potentially giving back some of its recent gains. Its Fibonacci retracement analysis suggests that the altcoin could fall to the $1.25 support level. If this support fails to hold, we could see a further drop towards the $1 mark.

However, this bearish outlook could be overturned if there is a surge in new demand for FTT. In this case, the asset is likely to maintain its upward trajectory, break above the $2.93 resistance level, and possibly climb to $3.53.

In simple terms, FTT is expected to see a potential rebound, supported by the demand zone that catalyzes the upward price movement. However, in the short term, it is expected that FTT may temporarily pull back to the support zone.