Factom is back alive as it rises from the ashes and surges by 61% in just 7 days! The cryptocurrency has actually increased by a total of 83% in 2020 alone and, after a brief retracement, we can expect this bullish run to develop higher.

Factom was stuck at resistance at around $2.30 during the entire period of January. When other cryptocurrencies started to soar, Factom remained quite stagnant. However, this all changed during February and Factom started to explode by a total of 132% to reach the 2020 high of $4.59 before it started to stall and reverse.

The cryptocurrency has dropped by a total of around 12% today but is finding strong support at the 200-days EMA. Could this be a potential opportunity to re-enter before we explode once again? Are there any reasons as to why Factom might be surging this year? Read on to find out :D.

Factom Price Analysis

FCT/USD - MEDIUM TERM - DAILY CHART

What Has Been Going On?

Taking a look at the daily chart above we can see that for the past 7-months of trading, Factom was trading within a narrowing descending price channel. It was held by resistance directly beneath the 100-days EMA and was never able to break above.

The cryptocurrency managed to find strong support at the $1.66 level during December 2019 which allowed the market to begin its process of stabilizing the previous downtrend. During January 2020, we can see that Factom was supported strongly at the $1.80 support level but was unable to overcome solid resistance at around $2.30.

This all started to change during February 2020 as the cryptocurrency started to surge at an increasing pace. It breached $2.30 and continued to break resistance a the 100-days EMA for the first time in over 8-months of trading. In breaking the 100-days EMA, Factom broke above the first descending trend line (dashed line) which had suppressed FCT since July 2019.

And the bulls did not stop there. Let us take a closer look at this descending price channel;

Why Is It A Big Deal?

It is a BIG DEAL because it is a SUPER LONG term descending price channel. Before the breakout of this channel, price action was suppressed between the highlighted boundaries. On every attempt that it tried to break, the market failed to do so and, instead, turned over and headed lower. Now the channel has been penetrated, it invalidates the previous trend and should, in turn, allow Factom to start creating higher highs again.

After breaking the dashed line, they continued to rocket higher as they broke above the upper boundary of the aforementioned falling price channel. After shooting above the upper boundary, FCT went on to breach resistance at $3.00, $3.20 (200-days EMA) and continued further higher to reach a high of around $4.60.

After such a parabolic move, it is no wonder that FCT quickly fell lower. It went on to drop back beneath $4.00 and closed yesterday’s trading session at $3.90. In today’s session, we can see FCT continued to drop lower but found strong support at $2.98 (short term .382 Fibonacci Retracement level) to climb back above the 200-days EMA.

Where Can We Go From Here?

So, where can we go? Well, the break above the ascending price channel most certainly signals a long term bullish trend shift. This is backed up with the break above the 200-days EMA. Remember, FCT has not penetrated up above 200-days EMA since April 2019 and, so long as we can stay above here, we can expect the bullish climb to push us higher.

All the technical indicators show that the market is extremely overbought - meaning the bulls maybe a little overstretched. In this case, it is natural for the market to pull back to allow space for the buyers to breathe again before making their next move.

If this is the case and FCT breaks beneath the 200-days EMA, the first level of strong support lies at $2.98. Beneath this, we can expect additional support at $2.55 (.786 Fib Retracement), $2.50 (100-days EMA), $2.30, $2.00, and $1.80. It is unlikely that we will break the 100-days EMA but if we do it provides an even better opportunity to enter.

Where Can We Head After This Retracement?

Once this pullback has run its course, the first level of resistance is obviously at $3.90 and $4.00. Above this, close resistance also lies at $4.07 which is a long term bearish .236 Fibonacci Retracement level measured from the May 2019 high to the December 2019 low.

If the buyers continue to breach resistance at $5.00, the next levels of resistance lie at $5.53 (bearish .382 Fib Retracement), $5.76 (1.414 Fib Extension), $6.32 (1.618 Fib Extension), and $6.72 (bearish .5 Fib Retracement). Above this, resistance is expected at $7.00. If the bulls reach $7.00, this is pretty much just over a 100% price increase already.

But we can go much higher than this!

Once $7.00 is breached, additional resistance lies at $7.90 (bearish .618 Fib Retracement), $9.00, $9.59 (bearish .786 Fib Retracement), and $10.60 (bearish .886 Fib Retracement).

Is This A Chance For A Good Entry?

This is the question everybody is wondering. Where do you want to enter? Well, let us look at the market from a longer termed perspective for a clearer picture.

As you can see, this latest price increase is nothing but a small blip in the overall market recovery. In fact, to get back to the previous all-time highs, Factom would need to inrease by a total above 2000% from the current price.

This shows that there is still ALOT of room ahead for Factom to recover and you should not feel late to the party at all! Once the resistance at $10 is broken, we will look for higher resistance at $15, $20, $33 and $42 over the longer period. 

Is PegNet A Reason That Factom Moving All Of A Sudden?

So, what is causing this breakout? 

Well, from a technical perspective, Factom has been under strong selling pressure for the past 2 years. At some point, all the sellers are bound to leave the market, leaving the bag holders behind. Those that remain are highly likely to be Factom HODLers, people that strongly believe in the future of the Factom protocol.

On the other side of things is a project that is starting to gain lots of traction within the Factom community. It is known as PegNet.

PegNet is a Stablecoin Network for decentralized finance that is built on top of the Factom protocol. It is a non-custodial network of tokens pegged to differed currencies and assets that allows trading and conversion of value without the need for 3rd parties to be involved. 

Through PoW and external oracles, PegNet is fully auditable - meaning you can trust it. The assets issued on PegNet have no external collateral backing them. Instead, value is determined from an Oracle Price Record (OPR) which receives the price data from miners on the PegNet network. 

The thing is, to receive PegNet you have to either mine it through your CPU or burn other assets to mint PEG. The PegNet wallet allows users to burn FCT from existence, forever, to bring PEG into existence. So far, there has been a total of 1.2 MILLION FCT that have been burned from the Factom total supply;

As you may be aware, the reduction of the supply of an asset should help to increase prices so long as demand stays the same or increases. If more FCT continues to be burnt at this same rate, we can only continue to expect the price for FCT to rise higher.

Conclusion

Factom has a lot of room to grow much further higher, so do not feel left out if you are not already in. The recent price retracements provide fantastic opportunities for potential investors to enter the market at favorable prices!

NOTE: Please do not take any of this information as financial advice and, as always, do your research before you start to invest in any cryptocurrency!