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"FET Token Tests Key Demand Zone Amid DeepSeek AI Competition"

Coin WorldWednesday, Jan 29, 2025 6:06 am ET

1min read

Artificial Superintelligence Alliance (ASIA) token, FET, has been facing challenges in recent weeks, with a 20% decline in the past seven days. This downturn occurred after FET retested a crucial pennant resistance level on the daily chart, sparking increased bearish sentiment.

The broader cryptocurrency market struggles have raised questions about FET's potential rebound or further decline. The rise of DeepSeek AI has significantly contributed to the recent market downturn, influencing sentiment across crypto and stock markets. As DeepSeek AI continues to gain traction, there is a genuine fear of competition between traditional and decentralized AI networks, heavily impacting projects like FET and contributing to their downtrend trajectory.

Santiment's on-chain metrics provide valuable insights into FET's current state. The altcoin MVRV ratio is -6.744%, signaling potential undervaluation. Historically, MVRV ratios below 1 often precede potential price rebounds. This indicates decreasing selling pressure for FET as it approaches a key demand zone at $1, which could pave the way for the altcoin accumulation phase.

Moreover, FET's daily on-chain transaction volume in profit has dropped to 976K, the lowest in recent times. This could suggest that traders are not selling their coins at unrealized losses—a sign of bearish market conditions. Conversely, active addresses spiked, which could hint at renewed interest and probable accumulation.

FET is currently testing the key demand zone around $1, which might indicate the next price movement. With bearish sentiment driven by DeepSeek AI's impact, the token might be pushed further down. However, the decentralized AI narrative of the project might counter this bearish trend. The growing number of active addresses complements the case for possible accumulation and may indicate a price reversal.

If FET holds the $1 level, it could begin a recovery phase. Failure to defend this zone could result in further dips, especially if broader market conditions remain bearish. As the market continues to evolve, investors will closely monitor FET's performance and the broader cryptocurrency landscape for any signs of a potential turnaround.

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