Fetch.ai has gained momentum in the past day, adding 11% to its price. However, liquidity clusters on the chart flag a risk of decline, as large sell orders are piled above the current price, increasing the likelihood of a drop.
Market direction remains uncertain, but AMBCrypto has mapped out a potential path for the asset.
FET sits between major orders
Fetch.ai’s [FET] latest upward move has pushed it close to a deep liquidity-cluster level on the chart. These clusters typically trigger long squeezes, with price declining sharply once it trades into that territory.
Liquidity clusters mark known zones on the chart that tend to house unfilled orders. When price trades into these areas, it absorbs those orders; clusters above price are mostly short-side orders.
These clusters have coincided with spot retail traders tightening their positions. CoinGlass’ spot exchange netflow shows retail investors have been cutting down on exposure to FET.
The chart pattern indicates waning confidence, and these investors anticipate a potential decline. FET’s accumulation dropped from 24.1 million on the 6th of October to $1.22 million on the 8th of December.
FET remains slightly bullish
On-chain sentiment suggests the market still leans medium-term bullish. While this outlook is positive, it also signals that bears may still be lurking.
Valuation multiples support this view. Notably, the ratio of FET’s token trading volume to its market capitalization has shown a slight spike.
This metric indicates how actively a token trades relative to its valuation. A reading of 0.2 reflects moderate trading activity and liquidity flow.
Daily volume was at $127.5 million—an 86% jump in the past day—while market capitalization was slightly higher at $596.4 million, according to CoinMarketCap.
Bullish momentum was even more evident in derivative markets, where long-side traders appeared unwilling to step back.
Bulls are not backing down
The derivatives market recorded one of its strongest inflows in the past day. Open Interest surged about 9% in the early hours, adding approximately $6.37 million to the market.
An increase of nearly 10% in total Open Interest signals high market interest and strong investor willingness to buy.
Funding Rate has also remained positive at 0.0083%, indicating slightly more bulls than bears. This setup tends to be net bullish for assets and typically supports the continuation of an upward rally.
For now, sentiment remains largely positive, with the outcome hinging on how price interacts with the liquidity-cluster zone.
Final Thoughts
- FET now sits between liquidity clusters that threaten its anticipated near-term rally.
- Trading activity in FET remains elevated relative to its fully diluted market valuation.
