The Fantom price has not been left behind in the ongoing cryptocurrency sell-off. The FTM token is trading at $2.15, which is about 35% below the highest level last week. Its total market capitalization has dropped to about $5.4 billion, making it the $27 billion in the world.

Cryptocurrency sell-off

The ongoing Fantom price sell-off is in line with the ongoing performance of the cryptocurrency industry. In the past few months, the prices of all cryptocurrencies has retreated sharply. For example, Bitcoin has fallen from almost $70,000 to below $35,000. 

Similarly, Ethereum’s price has declined from almost $5,000 to less than $3,500. Subsequently, the total market cap of all cryptocurrencies tracked by CoinGecko has dropped from more than $3 trillion to about $1.7 trillion.

There are two primary reasons why the price of Fantom and other cryptocurrencies has retreated sharply recently. First, there are concerns about the Federal Reserve and its planned actions this year.

In the past two years, the Fed has maintained an expansive monetary policy framework. It has slashed interest rates to a record low and embraced its biggest balance sheet expansion program on record. The bank did that by buying assets worth about $120 billion per month.

Now, the bank has hinted that it will scale back these asset purchases and start a process of gradual rate hikes as it battles the rising consumer prices. Data published this month showed that the headline consumer price index (CPI) rose to the highest level in over 40 years in December.

The Fed will meet this week and deliver its decision. In it, officials will likely provide hints that they will implement 3 to four hikes this year.

Therefore, this Fantom price sell-off is because of the hawkish Fed. Indeed, the performance has coincided with the sell-off in the tech-heavy Nasdaq 100 index.

The second reason why the FTM  price has crashed is about regulations. Last week, the Bank of Russia warned that the country should ban cryptocurrencies.

Some good news

The performance of the Fantom price has been difficult recently. However, there have been some good news. For one, Fantom has slowly grown to become the third-biggest smart contract platform in the world.

According to DeFi Llama, there are now 129 DeFi applications built in Fantom. These apps have a total value locked (TVL) of over $12.27 billion. As a result, by TVL,  it is the third biggest platform after Ethereum and Terra, which have a TVL of over $117 billion and $16.68 billion.

Some of the biggest apps in the Fantom ecosystems are Multichain, OxDAO, SpookySwap, Yearn Finance, and Curve. Most of these apps already exist in other platforms like Ethereum and Polygon.

The most notable thing is how fast Fantom has grown, considering that its platform was launched less than three years ago. In contrast, Cardano has been around for over six years, and there are no notable apps in its recently launched smart contract network.

Fantom price prediction

The daily chart shows that the FTM price has been in a deep sell-off in the past few days. The sell-off started when the coin formed what looks like a double-top pattern at the $3.3 level. It has moved below the 25-day and 50-day exponential moving averages (EMA), while the Relative Strength Index (RSI) has moved below the overbought level. 

Therefore, the path of the least resistance for the coin is lower, although the relief rally cannot be ruled out this week. If it happens, the next key level to watch will be at $2.70

The FTMUSDT price chart showing the double top formation