KEY TAKEAWAYS
FTX will begin repaying creditors their claims on Feb. 18.
The FTT price broke out from a resistance trend line.
Can FTT sustain its upward movement toward $2.50?
The FTT price bounced considerably on Feb. 3, creating a bullish candlestick that led to a breakout today. The price increase comes after news that FTX will begin repaying creditors’ claims on Feb. 18, with the first phase amounting to a payment between $6.5 and $7 billion.
Payments are based on November 2022 prices, when BTC was trading near $17,000. In addition to their original amount, creditors will receive a 9% annual interest.
With that in mind, let’s consider the price action and see if FTT can sustain this breakout.
FTT Price Breaks Resistance
Since July 2024, the FTT price has increased alongside an ascending support trend line. It bounced at the trend line in September, reaching a high of $4.40 in December. The price has declined since, confirming this as the cycle high.
FTT created a lower high later in the month (black circle), falling steeply since, creating a descending resistance trend line (dashed). The decline culminated with a low of $1.50 on Feb. 3, briefly taking the price below the ascending support trend line.
However, FTT created a bullish hammer candlestick (white icon), preventing the breakdown and leading to a breakout from the resistance trend line next week. This positive sign could take FTT to the next resistance at $2.80.
Despite the breakout, technical indicators are not bullish yet. While the Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are increasing, neither has crossed their bullish thresholds yet.
So, based on the daily time frame, it is still unclear if the FTT price will reach the $2.60 resistance area or if it will break down below the support trend line instead.
FTX Price to $3?
The wave count legitimizes the breakout, suggesting that the price has started wave B in an A-B-C corrective structure. This follows a completed five-wave increase (white) that started in July 2024, at the same time as the ascending support trend line.
If the count is accurate, wave A ended with the Feb. 3 lows, meaning FTT is now in wave B. The 0.5-0.618 Fibonacci retracement resistance area is between $2.95 and $3.29.
So, while FTT could increase toward $2.95-$3.30, this will likely mark the top of wave B, before wave C takes the price to new lows.
Bounce Before Breakdown
The FTT price has increased since Feb. 3 and broke out recently ahead of the start of the second phase of FTX claims distribution.
While the rally may continue, it is likely a corrective increase that will eventually lead to another drop to new lows.
