- The Fantom price dropped to a key support after some developers quit the network.
- It has formed a double-bottom pattern, signaling a potential rebound.
The Fantom price plummeted to a key support level on Monday as investors reacted to the sudden decline of the network’s total value locked (TVL). The FTM token dropped to a low of $1.3197, which was about 36% below its highest point during the weekend.
Developer exodus
Fantom is a leading blockchain project that seeks to be a leading alternative to Ethereum. It is a widely used platform that has seen significant growth in a relatively short period.
According to DeFi Llama, there are 197 apps live in the network. All these applications have a total value locked (TVL) of over $7.1 billion, making it the fifth-biggest platform in the world after Ethereum, Terra, Binance, and Avalanche.
However, a closer look at the TVL shows that it has plummeted sharply in the past few days. It has fallen from a high of almost $12 billion, which it touched last week.
Analysts cited the sharp decline to an announcement by Andre Cronje and Anton Nell that they were calling it quit. The two are the developers of Yearn Finance and Keep3r. In a statement, Nell said that about 25 projects will be terminated.
In a follow-up statement, the head of Fantom Foundation reiterated that the two developers were terminating their involvement and leaving them to existing teams. Still, the YFI price has dropped by more than 10% in the past 24 hours.
The Fantom price also crashed because of the overall performance of cryptocurrencies. In the past few days, the price of top coins have fallen sharply as investors watch the crisis in Ukraine and the rising inflation.
On Friday, the US published strong jobs numbers, that pointed to a more hawkish Fed. The American economy added more than 600k jobs while the unemployment rate crashed to 3.8%.
Fantom price forecast
The four-hour chart shows that the FTM price has been in a strong bearish trend in the past few days. The coin dropped to $1.311, which was the lowest level last week. It has therefore formed a double-bottom pattern, which is usually a bullish sign.
The coin remains below the 25-day and 50-day moving averages while the Money Flow Index (MFI) has moved above the oversold level.
Therefore, the bearish trend will be validated when the price moves below the key support level at $1.2960.
