The native token of bankrupt cryptocurrency exchange FTX continues to fall. Although it is still in an upward trend, things are not good for those who invested in FTT tokens. On October 7, before the confirmation hearing of FTX bankruptcy case, FTT token suddenly surged 56.80% to $3.422. This is the last hearing, and people are waiting to see whether the court will approve or reject the repayment plan of the bankrupt exchange.

As the court accepted the plan, the FTT token began to plummet. It fell 7.2% in the last 24 hours, after a 92% increase in the price of FTT in the past few days, driven by optimism about FTX's asset compensation plan. Investors initially reacted positively, but the sentiment soon changed. The court's approval of FTX's plan prompted many to lock in profits, putting downward pressure on the token price. This volatility in the FTT price shows that short-term market movements are driven by speculative trading.

FTX token holders turn bearish

Realized profits for FTT holders have surged in the past 24 hours as many rushed to sell their holdings. The rally, which was once driven by speculation to compensate for the asset, has now turned into a wave of profit-taking.

Although FTX’s assets have not yet been distributed to creditors, FTT holders are rushing to cash out because they are concerned that the compensation package may not be as favorable as initially hoped. This selling pressure has caused the token’s value to fall sharply.

The price drop points to a broad shift in investor sentiment. The market has turned bearish as many people lock in gains.

Initially, the rally was fueled by expectations that the FTX compensation plan would provide substantial relief to token holders, but skepticism has since taken hold. As a result, a continued sell-off could push FTT prices lower, especially as the overall cryptocurrency market remains volatile.

From a macro perspective, FTT's overall momentum is beginning to weaken. Technical indicators such as the relative strength index (RSI) suggest a trend reversal.

The RSI had previously reached overbought territory but is now retreating, suggesting that the bullish phase may be coming to an end. Such a shift could mark the beginning of a bearish downtrend, especially if more investors seek to secure profits.

Additionally, FTT's high volatility suggests further price volatility is possible. Large intraday price swings suggest that traders are actively responding to news and market developments. Given the broader market uncertainty, investors should be prepared for continued price instability in the short term.

FTT will be supported in the future

FTT has surged 93% in the past few days, driven by speculation about the FTX asset compensation plan. However, as the court hearing approaches, investor sentiment has shifted from bullish to skeptical. This shift has led to a recent sell-off of the token as holders worry about the potential negative impact of the plan's execution.

In the past 12 hours, FTT's price has plunged 16% and is currently trading at $2.46. Tuesday's price plunge, which saw FTT rise 40% intraday but then plunge 17%, highlights the high volatility of the market. This erratic price behavior is likely to continue as investor sentiment fluctuates.

Going forward, FTT is likely to continue its downtrend, possibly testing the $2.20 support level. However, if the bullish momentum resurfaces, the coin is likely to rebound, possibly rising to $2.74. A breakout above this level will invalidate the bearish outlook, bringing renewed optimism to FTT holders.

Looking to the future!

FTX's creditors are spread across 200 jurisdictions around the world while the estate works to finalize an agreement. In the process, the price of the FTT token may soar, but investors are exposed to huge risks. When the estate announces the liquidation of the native token, it will trigger a market panic and cause investors to lose their investment. It is in the best interest of investors to manage their positions before the official news is released. Sooner or later, the estate will liquidate the token to collect funds for repayment, as it obviously no longer has any use.

in short

Investors took profits amid questions about FTX’s asset compensation plan, pushing FTT down 16% after a 92% gain.

As token holders sold off, investor sentiment has shifted from bullish to bearish, with the RSI indicator showing a trend reversal.

FTT might test the $2.20 support level but if the bullish momentum returns, it could move back to $2.74, potentially invalidating the bearish outlook.