Fantom dApp volumes have increased three-fold within 24 hours to over $9M.
Rising volumes fueled a bullish rally as FTM attempted to breach a critical resistance at $0.52.
The cryptocurrency market edged lower today, with most altcoins trading in the red. However, Fantom [FTM] has defied the bearish sentiment with a 4% gain to trade at $0.511 at the time of writing.
FTM has been among the top market performers over the past week, with its 7-day gains standing at 15%. A surge in demand is driving the rally, given that trading volumes were up by more than 150% at press time per CoinMarketCap.
Increased interest in the Fantom network is also fuelling the upsurge. According to DappRadar, dApp volumes on the network surged nearly threefold from $3.4M to $9M within 24 hours.
These volumes have reached the highest level since late August.
Decentralized finance (DeFi) activity on the network is also on the rise. Per DeFiLlama, the network’s Total Value Locked (TVL) has increased by $2 billion to $77 billion.
Fantom tests a key resistance level
FTM price was making higher highs, and it was attempting a breakout past a critical resistance level at $0.52 at press time.
However, Fantom has been unable to breach this resistance for weeks, with each failed attempt being followed by a bearish reversal.
The Chaikin Money Flow (CMF) showed buyer confidence in a breakout. The metric has flipped positive, and tipping north, indicating that buying pressure has overwhelmed selling pressure.
The uptrend is also being supported by a surge in volumes, as the On Balance Volume (OBV) indicator is rising. Nevertheless, the sustainability of the uptrend will be confirmed once the smoothing line crosses above the OBV.
If this crossover happens, it could support FTM’s breach of the $0.52 resistance level and pave the way for a rally to the 1.618 Fibonacci level ($0.63).
On the other hand, the failure of FTM to breach this resistance could weaken the uptrend and cause the asset to drop to the support level of $0.46.
A look at the FTM liquidation levels suggested that if the price approaches $0.61, a bullish trend will be confirmed.
Data from Hyblock Capital showed that $12M short positions faces liquidation if FTM pushes to the $0.61-$0.63 range.
If the price approaches these levels, short sellers might start to close their positions to mitigate losses, which will fuel more gains.
Moreover, FTM’s Funding Rates on Coinglass had turned negative at press time, showing short positions are dominant. This suggests that many traders anticipate the rally will fail, and that FTM was headed for a bearish reversal.
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