FET Technical Analysis Jan 20

FET Volume Tells a Low Participation Story: No Panic Selling Despite Price Drop, Indicating Weak Conviction. The Real Story is Hidden in the Volume.

Volume Profile and Market Participation

FET’s 24-hour volume came in at 55.08 million dollars. This figure indicates moderate participation compared to recent weekly averages – neither excessive panic selling nor strong buyer interest. While the price slipped to 0.23 dollars with a 6.42% loss, examining the volume profile shows the Value Area (high-volume price zone) concentrated in the 0.24-0.26 range. This suggests market participants have been trading around these levels recently, but the current low volume whispers that the downtrend isn’t healthy.

When conducting volume analysis, understanding market participation is critical: In a healthy downtrend, volume should increase with each new low to show conviction. Here, however, volume remains mediocre alongside the declines. This suggests retail investors are sitting on the sidelines, while big players are holding their positions. In the Volume at Price (VAP) chart, a slight volume increase is observed around the 0.2222 support level (2 strong supports in MTF on 1D and 3D timeframes), which could indicate potential accumulation as the POC (Point of Control). However, the overall profile shows a wide barrel (naked POCs) – meaning unbalanced participation and high volatility risk.

Accumulation or Distribution?

Accumulation Signals

FET’s volume patterns show accumulation signals: Volume stays low on down days, indicating weak selling pressure. Especially when testing the 0.2222 support (score 73/100), there’s a slight volume spike – like a typical ‘spring’ move, hinting that big players are scooping up cheap. In the MTF volume context with 12 strong levels (1D: 2S/2R, 3D: 2S/1R, 1W: 2S/4R), support weight dominates on the weekly timeframe. RSI has dropped to 40.26 but isn’t oversold; volume divergence comes into play here – volume decreased as price made new lows, potential bullish divergence. These patterns resemble the ‘re-accumulation’ phase in Wyckoff methodology: Quiet accumulation before the breakout.

Distribution Risks

On the other hand, distribution warnings shouldn’t be ignored. When the 0.2492 resistance (score 78/100) was rejected, volume increased slightly, showing weak hands trapped. If volume explodes on a break below 0.1920 support (score 69/100), real distribution begins – high-volume breakdown triggers panic selling from trapped longs. Despite the current 6.42% drop, volume is low, but combined with a negative MACD histogram, there’s hidden distribution risk: Big players might be reducing positions, dragging retail down.

Price-Volume Harmony

Price is in a downtrend (Supertrend bearish, below EMA20 0.26), but lacks volume confirmation. For a healthy bear move, we expect volume upticks on down candles; here, conversely, volume is higher on up moves (short-term bounces) – weak volume confirmation for bearish price action. This divergence is critical: As price collapses to 0.23, volume is below average, no conviction. Conversely, volume dry-up on support tests signals buyers preparing. As you’ll see in FET Spot Analysis, spot volume is low compared to futures – low leverage speculation, organic moves in focus. Unhealthy volume: Low-volume drops signal reversal, high-volume breaks signal continuation.

Big Player Activity

Big player patterns are unclear but there are clues. Long-wick candles in the volume profile (around 0.2222 on 1D) resemble iceberg orders – institutions entering in pieces. VWAP (Volume Weighted Average Price) above 0.25, price staying below is bearish but volume delta (buy vs sell volume) is neutral. Over the last 3 days, negative volume delta on down moves is low – selling isn’t aggressive. This suggests institutions might be in accumulation mode, but it’s impossible to say for sure; just monitor the patterns. Futures volume is 2x spot (FET Futures Analysis for details), high leverage unwind risk – needs volume spike for big short squeeze.

Bitcoin Correlation

BTC at 89,472 dollars with -3.88% drop in downtrend (Supertrend bearish), pressuring altcoins like FET. If BTC supports at 88,281 / 86,637 / 84,662 break, FET could drop to 0.1920 – correlation around 0.85. If BTC resistances at 90,944 / 92,953 are surpassed, relief comes, FET tests 0.2649. BTC dominance rise crushes alts; current BTC weakness shows relative strength in FET – better participation in volume than BTC.

Volume-Based Outlook

Volume-based outlook is cautiously optimistic: Low volume weakens downside conviction, holding 0.2222 targets bullish 0.4028 (score 25). Breakdown targets bearish 0.0808 (score 22). Watch: Volume spike above 70M signals reversal, below 40M signals capitulation. Volume story contradicts price – smells like accumulation, but BTC-dependent. Be patient, wait for volume confirmation.