FTM’s Reaction to the Launch of Fantom Foundation’s Sonic Testnet

• Fantom Foundation launches Sonic Testnet to enhance smart contract execution on DeFi.
• Sonic Testnet offers cost savings, reduced storage space, and enhanced transactions.
• Fantom’s Sonic Testnet will remain accessible until end of 2023, Mainnet in 2024.

The Fantom Foundation has officially launched the Sonic Testnet to enhance the execution of smart contracts on its DeFi platform. The focus of the Sonic Testnet’s development is centered around three key areas.

Initially, Fantom highlighted that the forthcoming upgrade will incorporate a Fantom Virtual Machine, which is expected to outperform the widely-used Ethereum Virtual Machine (EMV) in terms of efficiency. The Sonic Testnet will also offer additional features such as cost savings for validators, a significant 90% reduction in storage space for data structures, and the availability of an enhanced transaction pool.

Before the revelation, the Fantom community was highly optimistic that the disclosure would positively impact the price movement. However, in the past 24 hours, FTM’s price remained approximately $0.22. This notably differed from the token’s performance over the past week, which saw a 29% rise.

Interest in FTM is increasing regardless

The FTM/USD 4-hour chart indicates a significant drop in FTM’s price from $0.23 shortly after the announcement of the Sonic Testnet. This decline appears to be a classic case of “buy the rumor, sell the news”, particularly given the noticeable buying pressure since FTM was traded at $0.17.

In the meantime, bullish investors have capitalized on the reduced price to acquire more FTM, as evidenced by the upward trend in price action. Additionally, the Chaikin Money Flow (CMF) was recorded at 0.05 at the time of reporting. Despite the decrease in the CMF, the positive value could suggest that there is still significant buying pressure. If the indicator stays above the zero midpoint, FTM could reach $0.24. However, this increase would be contingent on the Relative Strength Index (RSI) readings.

As of the latest update, the RSI stood at 64.05. This RSI value might indicate a diminishing power of purchasers in the market. Furthermore, the drop could be linked to the initial overbought status the indicator reached at 81.30.

If the RSI falls under 60, FTM could decrease to $0.20. Nonetheless, if buying pressure is revived, it could coincide with the forecast above to attain $0.24.

Despite the apparent deadlock exhibited by FTM, market participants remain optimistic about potential gains from its price fluctuations. This conclusion is drawn from the escalating open interest. A surge in open interest could indicate substantial liquidity surrounding a cryptocurrency. Conversely, a decline in open interest signifies reduced engagement with contracts associated with a token. Therefore, the rise in this indicator suggests that traders believe FTM’s price is worth monitoring in anticipation of potential returns.

To sum up, the Fantom Foundation has announced that the Sonic Testnet will continue to be accessible to users until the end of this year. The launch of the Mainnet is planned for Spring 2024.