ASI Alliance Merger Set for June 13 – FET Price Drops 20%

Key Takeaways

• The ASI merger is set to be completed on June 13, creating the ASI token.
• FET was selected as the reserve currency for the ASI alliance and will be swapped at a 1:1 ratio.
• AGIX and OCEAN will be swapped for ASI at a 1:043 conversion rate.

In the beginning of April, Fetch.AI, Ocean Protocol and SingularityNET announced the intent of creating a decentralized AI platform, the Artificial Superintelligence Alliance (ASI).

AGIX holders voted on the proposal on April 16, and the merger went through. On May 29, it was announced that the merger will be complete on June 13. However, the FET price did not react positively to the news. Rather, it has been falling since a rejection on May 22.

FET Falls Despite Merger Announcement

On May 29, the Fetch.ai team announced that a date has been set for the ASI alliance merger, which will go through on June 13. At the current market capitalizations of FET, AGIX and OCEAN, the ASI token will have a market capitalization of $5.8 billion.

https://twitter.com/Fetch_ai/status/1795818581394894994

The announcement did not have a positive effect on the FET price, which has fallen since a high of $2.71 on May 22 (red icons). The decrease validated the $2.50 horizontal area as resistance. Moreover, it confirmed the creation of an ascending parallel channel, considered a bearish pattern.  Currently, FET trades close to this channel’s support trend line.

Because the price trades in a corrective pattern and below resistance, a breakdown is the most likely future price outlook. If this happens, FET will likely fall another 24% and reach the $1.65 horizontal support area.

On the flip side, breaking out from the $2.50 resistance area can trigger an increase to the channel’s resistance trend line at $2.80. There is no indication this will happen soon.

What is the Governance Proposal?

On April 2, governance proposals for the ASI alliance started for FET and AGIX holders. There were three government proposals for FET, and they passed with a turnout of 76%. 99% of the votes were positive.

The first one was about FET being converted at a 1:1 rate to ASI, while the second and third dealt with AGIX and OCEAN merging into ASI at a 1:0.43 conversion rate.

While OCEAN holders did not have a governance proposal in their own blockchain, AGIX ones did. The voting  closes today, with holders having votes  proportional to their AGIX holdings.

How Have the Tokens Performed Since the ASI Announcement?

The three AI tokens have all underperformed since the announcement on April 2. FET (white) has fallen by 28%, while AGIX (orange) and OCEAN (blue) have fallen 30%.

FET will be the reserve currency for the alliance and the tokens will be converted to ASI at a 1:1 ratio. Then, OCEAN and AGIX will be converted at a 0.43 ratio.

Given this mechanism, it is likely that the price of OCEAN and AGIX will be close to 0.43 times the price of FET in order to eliminate arbitrage opportunities. The procedure also explains the fact that the price movement of the three assets is almost identical to each other since the announcement.

Currently, OCEAN has a 0.41 ratio with the FET price while AGIX has a 0.40 one, meaning they are slightly undervalued.

FET Price Prediction: When Will the Correction End?

The FET price started a five-wave upward movement in December 2022. It is likely that wave three ended on March 11 and the price is now correcting in wave four. However, it is not certain if wave four has ended or another decrease is in store.

The sub-wave count is in black, showing an extended wave three and an irregular flat correction for wave four. The correction reached the 0.5 Fibonacci retracement support level before bouncing (green icon).

The daily RSI also fell to 36, the lowest level since wave three started. This confirms the price is in wave four.

Wave four is often shallow, so even if the FET price has not reached its bottom yet, it is likely to do so at the 0.618 Fibonacci retracement support level of $1.30 at the lowest.

However, it is possible FET will continue trading sideways before wave five begins, taking it to a new all-time high.

Better Times Ahead

The FET price has fallen significantly since its all-time high of $3.48 on March 28. While the price bounced on April 13, it is not certain if the correction is complete. In any case, the wave count indicates that it is unlikely FET falls below $1.30 in the current correction. Another upward movement and all-time high are probable this year.