Traders in Fetch.ai (FET) are showing renewed optimism surrounding the project’s ongoing merger with Ocean Protocol (OCEAN) and SingularityNET (AGIX) to form the Artificial Superintelligence Alliance (ASI). This comes despite a recent price decline for the FET token.
The merger, which is halfway complete, aims to create a unified platform for artificial intelligence (AI) applications in the blockchain space. While initial excitement was high, FET’s price has dropped over 16% in the last week.
Funding Rate Hints at Shifting Expectations
However, a key indicator suggests a shift in sentiment. The funding rate, which reflects the cost of holding leveraged positions, dipped into negative territory in mid-July, indicating that traders anticipated a price decrease for FET.
As of today, the funding rate has returned to positive territory, albeit marginally. This suggests a change in perception, with some traders now potentially expecting a price increase.
Open Interest on the Rise
Supporting this notion is the rise in Open Interest (OI), which refers to the total value of outstanding futures contracts. After hitting a month-long low, FET’s OI has climbed significantly, indicating traders are opening more positions in anticipation of future price movements.
Technical Analysis Paints a Cautious Picture
Despite the renewed optimism, technical indicators paint a less clear picture. The Stochastic Relative Strength Index (Stoch RSI), a measure of momentum, shows a decline, suggesting a potential price slide.
However, there’s also support at $1.11, which could prevent a steeper decline. A significant price bounce, however, appears unlikely in the short term.
Bullish Outlook Hinges on Future Developments
If the positive sentiment translates to increased demand and bulls can defend the current support level, FET’s price could reverse course. This could lead to a test of resistance levels at $1.55 and potentially $1.69.
The success of the second phase of the ASI merger will be crucial in determining the long-term impact on FET‘s price. If the alliance delivers on its promises, it could lead to a more positive outlook for the token.
