Hello, my fellow traders! I am back again with another price prediction for 2020. With Bitcoin attempting to get back on the rise during the first week of March 2020, there is still quite a buzz within the industry. This is especially so when we consider the fact that the Bitcoin block halving is coming in the following months!

One great thing about trading is that, regardless of the direction of the market, we can always make a profit so long as we remain disciplined and manage our risk wisely. Cryptocurrency exchanges allow us to make this happen - specifically derivatives exchanges. These derivatives exchanges allow us to place trades in either the upward (LONG) or downward (SHORT) direction of the market, allowing us to profit in either direction.

Well, there is a new derivatives exchange on the block that is most likely going to achieve the unicorn status in 2020 to join the big leagues. This exchange is called FTX Trading and this is the platform and token I would like to talk to you guys about today.

Firstly, let us take a look at the performance of FTX Token (FTT) below;

As you can see, FTT is relatively new to the market as it only started to trade during August 2019. Nevertheless, this did not stop the cryptocurrency growing by a considerable 100% during 2019 as the coin increased from a low price of around $1.10 to the 2019 high of $2.30. 

FTT has continued to climb even further in 2020 as it rises by another 45% to reach the current all-time high price of around $3.10.

The FTX Trading platform will literally become the new powerhouse on the block due to the fact that it is receiving backing from the largest liquidity providers in the game. It is also being invested in by many high profile venture capitalist firms and Binance Exchange has even taken a piece of the pie for themselves. The team consists of a highly experienced center and they have some extraordinary plans to grow at a rapid rate during 2020.

Furthermore, the FTX Exchange is not just any other derivatives exchange. It has a lot of novel trading instruments on offer that no other exchange has offered. Furthermore, they continue to add further instruments to their arsenal as they continue to amass more traders on a daily basis.

For the reasons stated above, and more discussed below, I believe that FTT has the potential to surge by a further 100% in 2020 to reach my target price of $5.50 at some point during the year. Bear in mind that the cryptocurrency has already increased by around 45% already this year so the total price increase for 2020 will be around 160% if FTT does hit my target. 

In all honesty, I actually believe that FTT will most likely surge past my level but, in the spirit of analysis, there are no tools available for me to provide accurate predictions past the highest level I can chart for which is around $5.50.

In this article, I’ll firstly cover a range of topics that I believe will influence FTT in reaching my $5.50 target during 2020 and then analyze FTT on the daily chart to highlight some areas of resistance on the way toward the target.

What Is FTX Token?

FTX is a Hong Kong based cryptocurrency derivatives exchange market that offers futures, leveraged tokens, and OTC trading. It also recently opened the president 2020 market in which you can place trades on which presidential candidate you believe will win the upcoming election. 

It was officially launched in April 2019 after being incorporated in Antigua and Barbuda by FTX Trading LTD. It is supposedly backed by Alameda Research, a quantitative firm, that is a liquidity provider that traders up to $1billion per day - making it pretty much the largest market maker in the cryptocurrency world.

The exchange can claim its origins from specializing in OTC Trading. The FTX team had previously launched an automated OTC RFQ (Request For Quote) system that allowed users to receive quotes on over 20 coins and trade them. During this time, they continuously offered extremely tight spreads with fast settlements and zero fees. This caused them to increase their volume quite quickly as they became a source of liquidity for OTC desks and exchanges within the cryptocurrency industry.

This OTC system has now been integrated into the FTX Trading platform. 

Who Is On The Team?

The team consists of previous Wall Street quant funds and large-scale tech companies. 

The founder and CEO, Sam Bankman-Fried, was a trader on Jane Street Capital’s international ETF desk where he traded ETFs, futures, currencies, and equities. He also designed and automated their OTC Trading System.

Their CTO, Gary Wang, was a software engineer at Google and helped Sam to found FTX Trading. Wang has built systems to affiliate prices, decrease latency and memory usage by over 50%. 

Both of these founders are graduates from MIT.

What Does FTX Even Offer?

The exchange offers the typical futures contracts that you would expect from any derivatives exchange. They offer both quarterly and perpetual contracts (contracts with no expiration date) on Bitcoin, Ethereum, USDT, BNB, and LEO. 

The great thing about their futures exchange is the fact that Clawbacks are minimized. Typically, clawbacks occur on other exchanges as a means to liquidate socialized losses. FTX uses a three-tiered liquidation model to handle margin calls and prevent this from ever occurring.

They also the first in the industry to launch MOVE contracts which are futures that expire to the raw amount that BTC moves in a time period. This allows users to trade on the amount Bitcoin will move without having to trade the direction of the move.

Another novel feature they have released is known as leveraged tokens which are ERC20 and BEP2 tokens that already contain the leveraged algorithm. They allow users to put on short or leveraged positions without the need for margin trading as they leverage is already listed within the instrument itself. 

Users can use leveraged tokens to manage risk because the leveraged token automatically reinvests profits into the underlying asset to reduce risk. They can also be withdrawn straight to your personal wallet as they are like regular ERC20 tokens.

Another great feature is the fact that they let you trade on “Index Futures” that allow you to trade on entire sectors of the cryptocurrency ecosystem. They even have a “SHIT” coin index which is created from a basket of low-cap cryptocurrencies.

Oh, and you can even place some trades on who you think will win the upcoming 2020 presidential elections! With this newly launched feature, you can buy contracts on TRUMP, BERNIE, BLOOMBERG, PETE, WARREN, and BIDEN.

FTT Token

The FTT token is the utility token that drives the entire FTX trading platform. The team has created an ecosystem that is designed to increase the demand for the FTT token as well as to decrease the circulating supply. 

They plan on reducing the circulating supply through their token burning mechanism in which one-third of all fees generated are used to repurchase FTT until at least 50% of the supply has been burned. This creates an automatic demand for FTT on the market.

The FTT token is also used as collateral for futures and margin trading positions which allows users to take on bigger trades if they wish to do so. Furthermore, as expected, holding the FTT token will provide a discount on trading fees to further increase the demand for FTT. The discounts received correspond to the following table;

To find out more about FTT and FTX itself, I recommend taking a look at this blog post.

Aggressive Expansion Plans For 2020

The team is constantly focused on growing their exchange as fast as they can. Being backed by Alameda Research is not enough for them! They were even invested in by Binance, the colossus cryptocurrency exchange, in late 2019 for an undisclosed amount. Changpeng Zhao, CEO of Binance, had the following to say about FTX;

“The FTX team has created an innovative cryptocurrency trading platform with stunning growth. With their history as professional traders, we see a bit of ourselves in the FTX team and believe in their potential to be a major player in cryptocurrency derivatives markets.”

They recently announced that they would be selling tokens that represented equity in the company through an instrument called FTX_EQUITY. The token will be valued at $2 with 500 million available to be sold which means they value themselves at $1 billion. The minimum value to invest is $250,000, so it is not intended for small-time investors.

Sino Global Capital had recently invested in their platform and they had stated that their investment will help to fund their 2020 expansion plans that will include the release of new products, a full development platform for users, a new mobile app, and further listings of Leveraged Tokens on partner exchanges.

Judging from their plans, there is a lot to look forward to during the course of the year for FTX and FTT.

FTX Token (FTT) Price Analysis

LONG TERM - DAILY CHART

What Has Been Going On?

Taking a look at the daily chart above, we can see that FTT really started to take off during December 2019 when it started to rise from around $1.50 to reach as high as $2.25. It stalled at around $2.25 for a few weeks but eventually went on to break above this level during mid-January 2020.

Throughout February 2020, the cryptocurrency continued to climb further higher to reach a high above $3.00. Unfortunately, it had run into resistance at $2.96, provided by a 1.618 Fibonacci Extension level which caused it to roll over and drop lower.

During the retracement, FTT was able to find strong support at the .5 Fibonacci Retracement level priced at $2.24. This level was further bolstered by the 100-day EMA level and it allowed FTT to bounce higher to reach the current trading price of around $2.67.

Are We Bullish Or Bearish (as of March 2020)?

As of early March 2020, we would have to consider the market to be bullish. However, for this bullish run to continue we must see FTT breaking and closing above the $3.00 level pretty soon. If it was to drop and close beneath $2.24 then the market would probably turn bearish in the short term.

If the sellers do push lower, the first level of support lies at $2.44 (.382 Fibonacci Retracement level). This is then followed by support at $2.24 (.5 Fibonacci Retracement level & 100-day EMA).

If the selling continues beneath $2.20, support can be found at $2.03 (.618 Fib Retracement), $1.80 (200-day EMA), $1.74 (.786 Fib Retracement), and $1.57 (.886 Fib Retracement).

Where Is The Resistance On The Way Up TO $5.50?

On the way up to my target of $5.50, the first level of resistance to be broken lies at $2.74 which is provided by a 1.414 Fib Extension level (drawn in green). This is followed by resistance at $2.96 (1.618 Fib Extension - drawn in green) and $3.00.

Above $3.00, resistance lies at $3.24, $3.35 (short term 1.272 Fib Extension - red), $3.50 (short term 1.414 Fib Extension - red), and $3.68 (short term 1.618 Fib Extension - red). Following this, resistance lies at $3.86 (1.414 Fib Extension - purple), $4.00, and $4.24 (1.618 Fib Extension - purple).

If the buying pressure can cause FTT to rise above $4.50, additional resistance can then be found at $4.74 which is provided by a long term 1.272 Fibonacci Extension level (drawn in blue). This is then followed up with higher resistance at $5.03 (long term 1.414 Fib Extension - blue), $5.20, and $5.43 (long term Fib Extension - blue). 

If the buyers can clear this level, they will be free to make an attempt at my 2020 target of $5.50. In all honesty, I believe FTT will rise much higher than this, however, there is not enough price data for me to be able to analyze the market beyond the highest Fibonacci Extension level that I have drawn.

Conclusion

FTT most certainly has the potential to rise toward the $5.50 level in 2020. This is especially so when we consider the fact that the FTX platform is reaching out for further high-profile backers. As their rapid growth expansion plan starts to unfold, we can expect the market to continue to rise much higher in-line with the number of additional users on the exchange itself.