Fetch.ai (FET) ready to jumpstart growth ahead of merger into ASI
Traders have been looking at the idea of merging three AI tokens into a single asset under the ticker ASI with a lot of optimism. However, their sentiment has changed markedly after Fetch.ai (FET) has fallen in price by more than 15% over the past seven days
The first phase of the merger of three AI token projects - Fetch.ai (FET), SingularityNET (AGIX) and Ocean Protocol (OCEAN) - started back on July 1. However, it did not go quite smoothly, and during the first phase the developers encountered unforeseen problems. Against this background, investors' previous optimism about the initiative began to melt away.
Bulls' interest in Fetch.ai is growing
At the moment of writing the analysis, FET AI token is trading at $1.28, having decreased by 2.35% over the last day.
The funding rate deserves special attention - during the period from July 19 to July 22, it slipped into the negative zone. This morning, July 24, it was still in that range. However, by the time of publication, the rate had risen to 0.01% and was positive.
The funding rate is a mechanism that balances long and short positions in the open-ended futures contract market.
Positive values indicate the dominance of long contracts and mean that the contract price is higher than the spot price. This means that more traders buy the coin with the expectation of selling it at a higher price. Meanwhile, a negative funding rate means that more traders buy the asset expecting the price to fall rather than rise.
If selling pressure intensifies, the price of Fetch.ai could remain in a bearish trend. Interestingly, the open interest (OI) - that is, the value of all open contracts in the market - for this token increased during the same period when positive expectations emerged.
Shortly before this analysis was written, the OI was at the levels of the monthly minimum, but by the time of publication it had grown to $46.58 million.
If traders are more active in opening new positions on FET, it could help the cryptocurrency recoup some of its previous losses.
About why the crypto exchange Coinbase decided not to support the merger of SingularityNet, Fetch.AI and Ocean Protocol - read in our article.
FET price forecast: bearish pressure persists
Technical analysis tools suggest that the outlook for FET is not too rosy at the moment. This is hinted at, among other things, by the Relative Strength Index (RSI), which is currently down.
Strong support at $1.11 could help prevent the FET price from falling further. However, a significant rebound is now unlikely as the price still risks slipping below $1.27.
Bullish confidence and the growing optimism of traders may help the token's price rise. Then FET will try to overcome the resistance at $1.55 and move towards $1.69.
