Fantom (FTM) has recently shown bullish momentum after breaking out of a descending symmetrical triangle, signaling a potential shift in trend. As of now, FTM is trading at $0.5425, reflecting a 6% price increase in the past 24 hours. This positive price action is supported by on-chain data that suggests growing network engagement. However, key resistance levels remain ahead, particularly at the $0.56 mark, which could pose a challenge to FTM’s continued ascent.

Growing Network Activity Signals Strong Fundamentals

FTM’s network activity has experienced a significant surge recently, signaling increasing adoption and user engagement. New addresses on the Fantom network rose by 35% over the past week, highlighting fresh interest in the project. Additionally, active addresses increased by 10%, reinforcing the notion of rising demand for the token. These developments suggest that the fundamental outlook for Fantom remains strong, supporting the bullish sentiment in the market.

However, the increase in zero-balance addresses, which jumped by over 50%, may indicate that some traders are consolidating or exiting their positions. This could result in profit-taking, potentially dampening momentum if it continues at a high rate. As such, while growing network activity is a positive sign, sustained demand and support at key price levels are necessary to keep the momentum going.

Shift in Transaction Activity: Retail Traders Lead the Charge

Transaction activity data presents a mixed picture for Fantom. Smaller transactions under $1 have increased by 60%, signaling a rise in retail investor participation. However, larger transactions between $10,000 and $100,000 have seen a decline, with no transactions exceeding $1 million during the past week. This lack of activity from institutional investors and whales suggests that the larger players are currently sitting on the sidelines, which could limit the token’s potential for a rapid breakout.

Retail investors seem to be the primary drivers of the recent price action, which could either fuel further upward movement or result in a pullback if profit-taking becomes more prevalent.

Critical Resistance at $0.56: Will FTM Break Through?

Currently, FTM is testing a crucial resistance level at $0.56. This price point is pivotal, as breaking above it could pave the way for the next significant price targets at $0.85 and $1.43. A successful breakout above this resistance could lead to a continuation of the bullish trend, attracting more traders and investors to the token.

However, if FTM fails to hold above $0.56, it may encounter a pullback toward lower levels around $0.40 to $0.45, where support could be found. The market is at a crossroads, and whether FTM can hold above resistance or experience a retreat depends largely on upcoming price action.

Profit-Taking Looms: MVRV Ratio Decline

The Market-Value-to-Realized-Value (MVRV) ratio has seen a noticeable drop, signaling that many traders who bought FTM at lower prices may be locking in profits. This shift in sentiment could introduce selling pressure, potentially causing FTM’s price to struggle in the short term. If the profit-taking trend continues, it may halt the token’s progress toward higher price levels.

However, if the demand for FTM remains strong, the selling pressure could be absorbed, allowing the price to break through resistance and sustain its upward trajectory.

Conclusion: Is FTM Poised for Further Gains?

Fantom’s breakout from its descending triangle and rising network activity point toward a bullish outlook for the token. However, profit-taking and the lack of whale involvement could hinder its short-term potential. For FTM to continue its climb, it must first flip the $0.56 resistance into support. A successful breakthrough could push the token toward $0.85, with further gains possible if the momentum remains intact.

Traders should keep an eye on the token’s ability to hold above the key $0.56 level, as failure to do so could lead to a retracement. The coming days will be critical in determining whether FTM can maintain its bullish momentum or if a pullback is imminent.