Fantom’s impressive November rally has brought attention to critical price levels. With a surge in MVRV ratio and a breakout from technical patterns, key resistance levels could determine the next phase for FTM.

Fantom (FTM) has been one of the top-performing altcoins in November, posting a remarkable 48% gain. As the price continues to climb, reaching $0.957 after an 8% increase in just 24 hours, attention is turning to its technical indicators and key price levels that could dictate its next move.

Fantom’s MVRV Ratio Signals Profitability

One of the key metrics to watch for Fantom is its Market Value to Realized Value (MVRV) ratio, which has risen to 1.59 — its highest point in over three months. The MVRV ratio is crucial for assessing whether an asset is under or overvalued. At 1.59, it indicates that the average FTM holder is currently sitting on a 59% profit. This suggests that Fantom’s recent rally has positioned the token as a relatively well-priced asset, leaving room for further growth.

However, traders should remain cautious if the MVRV ratio rises above 2, a level that could indicate that FTM is becoming overvalued. A breakout above this threshold could lead to a trend reversal, as it might trigger profit-taking from holders, potentially causing a price pullback.

Rising Profitability Among Fantom Wallets

Another sign of bullish sentiment comes from the increasing percentage of profitable Fantom wallets. In the past week, the percentage of wallets holding FTM tokens in profit has climbed from 50% to 58%. Meanwhile, the percentage of wallets in a loss has decreased from 46% to 39%. This shift indicates that more holders are seeing returns on their investments, which can foster continued positive sentiment in the market.

Fantom’s growing profitability is also reflected in the In/Out of the Money metric, which tracks the price levels where FTM tokens were last purchased. Over 22 million FTM tokens were bought by 4,580 addresses at prices between $0.98 and $1.24. If the price moves toward these levels, these addresses could act as potential resistance points, as profit-taking may accelerate.

Breakout from Broadening Wedge Pattern

On its one-day chart, Fantom recently broke out of a broadening wedge pattern, a technical formation that often signals a continuation of the prevailing trend. This breakout was accompanied by a surge in trading volume, indicating that the bullish momentum may continue. The green histogram bars on the chart suggest an increase in buying activity, supporting the case for further upward movement.

Additional technical indicators also point to continued bullishness for Fantom. The Moving Average Convergence Divergence (MACD) has shown positive momentum, confirming the uptrend. Similarly, the Chaikin Money Flow (CMF), with a value of 0.23, indicates that buyers are in control, further supporting the case for a potential rally.

Key Price Target: $1.268

Given the positive technical indicators, Fantom’s next key target could be the 1.618 Fibonacci retracement level, located at approximately $1.268. This level is often viewed as a strong resistance zone and could trigger a 33% rally if buying activity remains strong. If Fantom can break above this level, the next key price zone to watch would be $1.50, which is another critical resistance point.

Derivatives Market Showing Contradictory Sentiment

Despite the strong bullish signals from the spot market, the derivatives market paints a slightly different picture. Traders appear to be taking short positions on Fantom, as evidenced by the decline in the Long/Short Ratio. Over the past week, the ratio dropped from 0.97 to 0.92, indicating that more traders are betting against FTM’s price increase by opening leveraged short positions.

This divergence in sentiment between the spot market and the derivatives market suggests that while the current trend is bullish, traders may be preparing for a potential reversal or correction. This cautious sentiment in the derivatives market could act as a warning for those closely monitoring Fantom’s price action.

Conclusion: A Critical Moment for Fantom

Fantom’s 48% gain in November has captured the attention of both traders and investors. As the token approaches key resistance levels, such as $1.268, it is clear that FTM’s price could continue to rise, especially with the positive momentum from the spot market. However, the MVRV ratio’s climb and growing short interest in the derivatives market indicate that caution is needed. If the MVRV ratio surpasses 2 or if profit-taking intensifies, a trend reversal may be in the cards.

Traders and investors should keep a close eye on key levels, including the $1.268 target and the broader market sentiment, to gauge whether Fantom’s impressive rally will continue or face a correction.