Fantom (FTM) trades in a third straight bearish session during the early Asian trading hours on Friday. The FTM is down 9.81% on the day after dropping as much as 20% over the last three days.
This comes after over $110 million worth of USDC, wBTC and wETH reportedly exited the Multichain bridge. Initially, it was feared that the downturn was due to dumping but it later emerged that it was probably a whale moving their assets from Multichain to Stargate.
Both Multigate and Stargate are bridging networks allowing for the transfer of cryptocurrencies and NFT’s between blockchains. However, Stargate appears a bit superior to Multichain which allows blockchains to use LayerZero to initiate communication and transactions directly with each other without the need for an intermediary.
On Thursday, Peckshield, a blockchain security and data analytics company, posted on Twitter with a possible explanation of what was happening with Fantom. According to PeckShield, there were a series of transactions totaling more than $110 million worth of USD Coin (USDC), wrapped Bitcoin (BTC) and wrapped Ethereum (wETH) which could be seen moving out of the bridge.
Hi @MultichainOrg you may want to take a look: https://t.co/D4GKGpuBtw pic.twitter.com/3qURqGmes8
— PeckShield Inc. (@peckshield) July 6, 2023
What was initially considered dumping turned out to be potential whale transactions moving assets to Stargate.
The Stargate bridge came to the limelight when LayerZero announced that it was partnering with Fantom to introduce the mentioned assets on the bridge. In the announcement, LayerZero also said that initially, USDC, wBTC, wETH, as well as USDT (Tether) would be able to be bridged between Fantom and Ethereum using only the Stargate bridge.
In response, holders of the assets moved to bring their holdings to Stargate resulting in millions of dollars worth of outflows.
The Fantom Foundation addressed the asset movement in a Tweet but is yet to confirm the partnership with LayerZero.
We are aware of a situation unfolding on the Multichain bridge. We are actively evaluating the circumstances and will provide an update as soon as we have more to share.
— Fantom Foundation (@FantomFDN) July 6, 2023
Meanwhile, the bearishness of the events continue to hurt FTM price which appears to be at risk of more losses.
Fantom Price Stares Into An Abyss As More Losses Loom
The FTM price action over the last few days saw it abandon its recovery, dropping below the ascending parallel channel on Wednesday. The token also lost a key support at $0.3044, provided by the 50-day Simple Moving Average (SMA).
At the moment, Fantom bulls are fighting to stay above the $0.25 major support. If this is lost, the price may drop to seek solace from the $0.22 psychological level. If this level is beached as well, the price may drop toward the June 10 swig low at $0.21.
FTM/USD Daily Chart
On the upside, Fantom will have to push back above $0.30 and flip the 50-day SMA back into support. If this happens, above the lower boundary of the channel at $0.3235 would place it back into the confines of the governing chart pattern.
Market participants could expect the price to oscillate within the channel for a few more days with the upper boundary of the channel acting as a dynamic resistance.
