key takeaways
- Phantom has gained over 45% in the last three days.
- The rally follows a proposal by Andre Cronje on a possible solution to help fUSD return to its desired $1 peg.
- Nevertheless, FTM has reached a critical area of resistance that could limit its upside potential.
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Phantom’s FTM token has gained momentum since Andre Cronje issued an offer to recover the fUSD peg.
Andre Cronje submits fUSD offer
The Phantom is gaining momentum quite quickly as there is speculation about Andre Cronje’s possible return to DeFi.
Cronje has caused a stir in the Phantom community over the past few days when he submitted an fUSD optimization proposal that aims to address the stablecoin’s serious de-pegging issue. Cronje, best known for creating yield optimization tool Year Finance and several other DeFi protocols, announced that he would be leaving crypto to return to the traditional finance sector in March, launching his long-awaited Solidly project on Phantom. After a few days.
Furthermore, a widely known Cronje-related Phantom address has added more than 100 million FTMs over the past two weeks, adding to the speculation surrounding his possible return to the Phantom ecosystem.
The FUSD offer comes during a turbulent period for the stablecoin market. Earlier this month, Terra suffered a dramatic collapse when its UST stablecoin lost its peg to the dollar. However, the Phantom Foundation has recently put out a twitter update Stating that “fUSD is not a UST,” it states that fUST is “over-collateralized” and backed by staking FTM. “Users create fUSD by borrowing against their staked FTM. If the value of the FTM drops below the minimum collateral ratio, the FTM is progressively auctioned off to users who use the FUSD (to hold the peg).” Let’s bid,” the post read.
Nevertheless, it remains to be seen whether Cronje’s offer can help fUSD regain its $1 peg.
FTM meets resistance
FTM surged over 45% over the weekend, indicating that market participants are confident that fUSD can be saved. A sudden surge triggered by a symmetrical triangle breakout developed on the four-hour chart.
Despite significant gains, Phantom appears to have reached resistance.
The transaction history shows that 207 addresses have previously purchased approximately 85 million FTMs between $0.49 and $0.51. This significant supply constraint could prevent prices from moving further as addresses begin to break even on their underwater positions.
A four-hour sustained close above $0.51 could help the Phantom move higher towards $0.56. Failing to cross $0.51 could encourage traders to sell their holdings, potentially pushing FTM back to the $0.43 support level.
Disclosure: At the time of writing, the author of this article holds BTC and ETH.
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