Factom has started to experience another turbulent month in June as prices drop further this past week. Over the past 7 days of trading, price for Factom has dropped a total of 40%, at the time of writing, to a new 13-month low for price as it hits $9.50.
The cryptocurrency is currently ranked at #110 in terms of overall market cap across the board with a total market cap value of $86.50 billion.
Although prices are significantly down, it is important to analyze the price drop in relation to the entire crypto market.
Total Cryptocurrency Market Capitalization – www.coinmarketcap.com
Looking at the chart above, over the course of the past 7 days the total market capitalization for all cryptocurrency has dropped from a high of $343 billion on June 8, to a low of $266 billion on June 13. This means that the entire cryptocurrency market has lost a significant amount that totals close to $77 billion over the past week. This should comfort Factom holders knowing that they are not alone in this price slash.
Factom was created in 2014 by Peter Kirby and designed to be a distributed record keeping system that could store documents and records of all kinds. The Factom blockchain stores the information in the form of a hash, and then records can be verified for changes easily. The Factom team has proposed that they can store millions of real time records within a single hash. For an in-depth read on Factom, check out our article “What is Factom”.
Let us take a look at Factom against the USD over the long term and analyze price action.
Price Analysis
FCT/USD – DAILY CHART – LONG TERM
https://www.tradingview.com/x/cvnt7EVO/
Analyzing the charts from a long-term perspective, we can see that price action has not been experiencing a great year as it hits a fresh yearly low on Wednesday, June 13.
The cryptocurrency started the year trading at a high of $127 but has since fallen drastically to a low of $7.29, a disturbing 94% drop in price from the yearly high to low.
Factom is now trading lower than the initial starting point from the incredible bullish run seen in December, where price action rallied from a low of $14.06 to a high of $127.
We can see that price action is currently approaching the downside 1.414 Fibonacci extension level at a price of $6.89. This is a Fibonacci extension taken from the initial bearish swing leg from the high seen on January 7 to the low seen on January 17. If price action manages to find it’s way down to this level then we can expect to see some form of significant support.
Let us take a closer look at price action over the more recent period.
FCT/USD – DAILY CHART – SHORT TERM
https://www.tradingview.com/x/zyn6Bz39/
Analyzing price action over the past 3 months, we can see that both May and June have proven to be devastating months for Factom as prices fell from a high of $32.09 in May to a low of $7.29 experienced on June 13. This constitutes to a 77% drop in price since May.
We can see that price has found some form of support at the short term 1.414 Fibonacci extension priced at $8.30. This is an extension taken from the highs seen in early May to the low of $15.38 seen on May 23. Price action came to test below this level and was strongly rejected before price experienced a short term reversal.
If price can retest and break above the $10 handle, then we may expect to see some resistance at the short term 1.272 Fibonacci extension (marked in red) at a price of $10.73. If price action then goes on to break above this level, we could expect prices to go on toward the long term 1.272 Fibonacci extension at the price of $15.40 where it will be met with fierce resistance.
Alternatively, if this short term bullish pressure is not long lived and price breaks below $8.39, then we could see price dropping further towards the long term 1.414 Fibonacci extension priced at $6.89.
The technical indicators at this current moment in time are showing no favor that helps the bulls. The RSI is trading within extreme oversold conditions, on the daily chart, as it battles its way above the 20 handle. If we are to expect the bulls to gain some momentum, we would like to see the RSI rise above the 50 handle.
The 7-day EMA and 21-day EMA have also taken a nosedive and pulled away from one another indicating the increased bearish momentum within the market over the past few days. If we are to see this bullish momentum begin to fade, we would firstly like to see price action make its way back toward the 7-day moving average. After this, we would like to see the 7-day EMA (blue line) cross up above the 21-day EMA (purple line) to signal a potential bullish short term shift within the market.
Let us move on and analyze how Factom has traded against BTC over the long term.
FCT/BTC – DAILY CHART – LONG TERM
https://www.tradingview.com/x/ApJbecja/
Analyzing Factom against BTC over the long term, we can see that Factom has been having a difficult year against Bitcoin. Factom had experienced an incredible bullish run during December 2017, where price action rallied from a low of 103K SATS to a high of 572K SATS on January 1, 2018.
Since then, price action has depreciated all the way down to the .886 Fibonacci retracement at a price level of 158K SATS. This is a Fibonacci retracement of the entire bullish run seen in December 2017.
If the bulls can hold price above the .886 Fibonacci retracement then we could see a short term price recovery over the next few weeks as they push price back toward near term resistance and retest the .786 Fibonacci retracement at a price of 205K SATS.
Alternatively, if price action fails to hold above 158K SATS then the next level of support to the downside can be located at 146K SATS closely followed by the December 2017 low at 103K SATS.
The RSI on the daily chart has reached oversold conditions and should be expected to reverse and head back toward the 50 handle as RSI usually does not tend to stay in oversold trading conditions for very long. This should provide some small form of hope for the bulls within the market.
The 7-day EMA and 21-day EMA are pointing in the downward direction indicating the increased bearish pressure. For the .886 Fibonacci retracement level to hold, we would like to see the 7-day EMA make its way back toward and cross up above the 21-day EMA to indicate that the bears have lost their control within the market.
Conclusion
The market have been hit hard but Factom has been hit harder. A 90% reduction from the highs is no small matter.
It is important to remember that even at these yearly lows, the Factom team continues to work and improve their product as the team has proven to build strong partnerships with titans such as Tim Draper and the Bill & Melinda Gates Foundation.
However, it seems that Factom has hit some strong support against Bitcoin which should in turn help to stabilize the dollar value of Factom, assuming that Bitcoin does not keep falling in price.
Related: Price Analysis: Fresh New Lows As BAT Is Hit Hard By A Falling Crypto Market
