FET Price Rally Cools Down as Overbought Conditions Point to Consolidation

Key Takeaways

•  FET’s bullish momentum has stalled near $0.78, indicating that the run to $1 may take longer than anticipated.
• The altcoin maintains a 0.94 correlation with Bitcoin, meaning sideways BTC movement is likely to limit its breakout.
• FET has failed multiple times to break above the $0.80 supply zone; hence, it could keep trading between $0.61 and $0.74.

FET, the native coin of the Artificial Superintelligence Alliance project, could struggle to keep up with its recent gains. FET’s price has increased by 55% within the past week, making it one of the best-performing cryptos.

But after showing signs of a quick run to $1, FET seems to have lost its steam. Due to this change, the rally to $1 might take longer than expected.

Here are the reasons for and the likely performance of altcoin in the short term.

FET Slips From Weekly Highs

FET’s breakout happened after it failed to drop below the horizontal support of the descending triangle on the daily chart. This development led FET’s price to retest $0.78 while bulls defended the support at $0.46.

Amid the price increase, the Relative Strength Index (RSI) climbed to a high reading, indicating notable bullish momentum. Apart from measuring momentum, the RSI also shows if an asset is overbought or oversold.

Ratings above 70 indicate that an asset is overbought. Those below 30 signify that the cryptocurrency is oversold.

As seen below, FET became overbought earlier in the week as the RSI surpassed 70. Later, the indicator’s reading retraced, leading FET’s price to drop $0.71.

Altcoin Tied to Bitcoin Movement

Another key factor that could influence FET’s price action is its strong correlation with Bitcoin (BTC). According to IntoTheBlock, the correlation coefficient between FET and BTC is currently 0.94.

This metric ranges from -1 to +1, where values near -1 suggest an inverse relationship and those near +1 indicate that the assets tend to move in the same direction.

Given this high correlation, it’s no surprise that as Bitcoin consolidates around $94,000, FET also hovers around $0.70.

If Bitcoin continues to trade sideways, FET’s price will likely follow that movement unless a project-specific catalyst intervenes.

FET Price Analysis: Consolidation Takes Over

On the 4-hour chart, CCN observed that FET faced a pullback because the supply zone was near $0.80. Historically, when FET tries to break past this region, it encounters rejection unless buying pressure is intense.

On several occasions between February and March, the FET price failed to break above this point as it faced resistance. With bullish pressure fading, it is unlikely that FET’s price will successfully break above this region again.

Data from the same chart also shows that the Chaikin Money Flow (CMF) reading has dropped below the zero signal line. This indicates a drop in buying pressure.

Should this remain the same, FET’s price will likely trade between $0.61 and $0.74 in the short term.

However, the CMF reading might break above the zero signal line if buying pressure increases. This could accelerate FET’s recovery and raise it to $1.06.

If the market conditions become highly bullish, the value could rise to $1.52. However, if selling pressure rises, a correction could follow. In that case, FET might slide toward $0.34.