Crypto Analysis: Flamingo Finance (FLM) Experiences a 200% Surge Followed by a Retreat, Indicators Point to Potential Breakout

Crypto Analysis: Flamingo Finance (FLM) Experiences a 200% Surge Followed by a Retreat, Indicators Point to Potential Breakout

Crypto News – The price of Flamingo Finance (FLM) witnessed a remarkable 200% surge on September 4 and 5, only to subsequently retrace, highlighting the significance of both diagonal and horizontal resistance levels.

Notably, despite the recent downturn, the readings on both the weekly and daily timeframes suggest the potential for an eventual breakout.

Flamingo Finance’s Price Struggles with Breakout Attempts FLM’s price has been confined beneath a descending resistance trendline since April 2022. Over this period, the price made several attempts to breach this line but consistently fell short of closing above it, often resulting in the formation of extended upper wicks (denoted by red icons), indicative of selling pressure.

However, it’s essential to recognize that with each touch, resistance lines tend to weaken. Consequently, an eventual breakout from this descending resistance line remains the most probable future price scenario.

Moreover, there is a bullish turn in the weekly Relative Strength Index (RSI), a momentum indicator used by traders to gauge whether a market is overbought or oversold, aiding them in making informed decisions regarding asset accumulation or selling.

Readings above 50, combined with an upward trend, signify an advantage for the bulls, while readings below 50 suggest the opposite.

The RSI has exhibited bullish divergence (illustrated by the green line), a phenomenon characterized by increasing momentum alongside a declining price. Such occurrences often precede upward price movements. Furthermore, the RSI is nearing the 50 mark, indicating a bullish trend.

In the event of a breakout, the FLM price has the potential to surge by as much as 250%, targeting the next resistance level at $0.290. However, should a breakout fail to materialize, a 50% decline towards the descending support line (represented by dashed lines) at $0.040 would be the most probable future price projection.

FLM Price Prediction: Timing the Breakout

On the daily timeframe, technical analysis reveals that FLM experienced a 200% price surge between September 4 and 5. Following this surge, FLM’s trading volume surged to its highest levels since June 2022. Additionally, the FLM social dominance metric reached a five-week high, as illustrated below:

However, the rapid increase in price was unsustainable, resulting in a long upper wick and a subsequent dip below the critical $0.120 horizontal resistance area.

Nevertheless, FLM continues to trade above an ascending support trendline in place since June. More recently, the price successfully validated this trendline on August 17, rebounding after reaching an all-time low of $0.044. Subsequently, it established a higher low on September 1 before accelerating its ascent.

Furthermore, the daily RSI remains in bullish territory, with the indicator remaining above the 50 mark.

Consequently, the most plausible FLM price projection suggests an eventual breakout from the descending resistance line and the $0.120 resistance level, potentially triggering a surge towards the subsequent resistance at $0.290.

However, a breakdown beneath the ascending support trendline would invalidate this bullish outlook, potentially leading to a decline towards the nearest support level at $0.040.