Fantom (FTM) is showing promising signs of recovery as it gears up for a major upgrade. The cryptocurrency recently surged by 16% on December 15 in anticipation of its rebranding and the rollout of the Sonic mainnet. The new update, designed to enhance Fantom’s performance by making it faster and more cost-efficient, is expected to improve its position in the highly competitive blockchain ecosystem. With a new token, Sonic (S), replacing FTM through a 1:1 swap, investors are eager to see how these changes will impact the price.

Key Technical Indicators Pointing to Potential Growth

Looking at the current price action, Fantom is in a strong bullish structure, especially after holding support at $1.2, which was seen as a critical level earlier in the year. This sets a solid foundation for future price targets, with investors now eyeing resistance levels at $1.6 and potentially $2.38.

One key indicator to note is the Relative Strength Index (RSI), which recently entered overbought territory, reflecting increased demand for the token. Alongside this, the Chaikin Money Flow (CMF) shows positive inflows, further bolstering the bullish sentiment around Fantom. These technical signals suggest that the market is in a favorable position for price appreciation, especially with the upcoming Sonic upgrade.

The $1.6 price point is a crucial level for Fantom’s price action. If FTM can push above this level and establish it as support, the chances of further price rallies increase. A successful breakout above this resistance could fuel more upward momentum and potentially drive Fantom towards the $2.38 target.

Whale Activity and Accumulation Signals Bullish Sentiment

Whale activity has been another important factor in Fantom’s recent surge. Over the past ten days, large holders (those with 10 million to 100 million FTM) have accumulated a significant 24 million FTM tokens. As of now, these wallets control nearly 500 million FTM tokens, which is double the amount held by smaller whale wallets holding between 1 million and 10 million FTM. This accumulation suggests that larger investors have a positive outlook on Fantom’s future prospects, especially with the impending Sonic upgrade.

However, a contrasting trend has emerged within the smaller whale group. These investors have been selling off their holdings, which could indicate some caution or uncertainty regarding the altcoin’s near-term prospects. The difference in behavior between large and small whales is creating mixed signals, highlighting that while institutional sentiment is largely bullish, there is still some volatility in the market.

Liquidity and Short Squeeze Potential

Liquidity data is also showing key levels that could determine Fantom’s next price move. The liquidation heatmap reveals short liquidations at $1.5, as well as long liquidations around $1.38. This creates an interesting scenario where market makers might target these areas for a liquidity sweep, which could propel FTM’s price through the $1.6 resistance level. A short squeeze triggered by a price move above $1.5 could push the price higher, accelerating the rally.

Conclusion: Is $1.6 Within Reach for Fantom?

As Fantom prepares for its Sonic upgrade, there’s a strong possibility that the token could see further upward movement. Technical indicators, whale accumulation, and liquidity data all suggest that $1.6 could be the next significant price level for FTM. However, the market still faces mixed signals, especially with the selling pressure from smaller whales. If the price clears $1.5 and triggers a short squeeze, Fantom could break through the $1.6 resistance, setting the stage for further gains. Investors should monitor these developments closely to gauge whether the market sentiment aligns with Fantom’s bullish potential.