HomeNewsFilecoin's Downtrend Raises Concerns for Future Performance

Filecoin’s Downtrend Raises Concerns for Future Performance

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  • Filecoin experiences a bearish breakout, suggesting potential further declines.
  • Weak Bitcoin performance might exacerbate the downward momentum for altcoins like FIL.

Filecoin’s [FIL] Bearish Momentum: A Deep Dive

Filecoin, known in the crypto arena as FIL, has sent tremors through the market with its recent departure from the price range it held in July and August. Bitcoin’s faltering stance, hovering perilously close to the critical $29.0k mark, adds another layer of uncertainty. A descent below this psychological price threshold could spell trouble for numerous altcoins, with FIL being no exception.

Sellers’ Bid to Turn Range-Low into Resistance

A closer look at the FIL/USDT chart on TradingView reveals an intriguing trend. Following a minor rally post the bearish breakout from the $4.3-$4.7 bracket, a subsequent red tick signifies sellers making their presence felt, attempting to turn the range-low into a formidable resistance.

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This isn’t merely speculative, as various indicators on the price chart seem to bolster this narrative. The Relative Strength Index (RSI), a crucial tool to gauge market momentum, has been recording lower lows in recent times. This points to a dwindling buying vigor, making way for increasing selling pressure. Adding to the bearish sentiment is the Chaikin Money Flow, which, at present, struggles to surpass the pivotal zero-mark, indicating persistent capital drainage from the FIL market.

For a more granular perspective, one can look to the Fibonacci retracement tool, placed strategically between the latest peaks and troughs. This tool’s indications hint at the possibility of FIL bears breaking the $4 barrier, potentially pushing towards a $3.8 target, especially if Bitcoin continues its muted act. The bearish momentum could push further to $3.5 if the resistance at the 50% Fibonacci level crumbles.

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However, all is not bleak for FIL enthusiasts. A bull resurgence, marked by reclaiming the range-low at $4.25, could revive aspirations of revisiting the range-high and potentially touching the daily bearish order block near the $5 mark.

Analyzing Open Interest Rates

A dive into the 1-hour chart provided by Coinalyze reflects a waning interest in FIL. Late July witnessed a decline in FIL’s Open Interest rate, which seemed to plateau through August, dancing between $86.5 million and $82 million. This trend suggests a bearish drift followed by a more ambivalent market sentiment. The Cumulative Volume Delta (CVD) further confirms this sentiment, indicating a decline in purchasing volumes, thereby augmenting the sellers’ upper hand. With Bitcoin’s underwhelming show, Filecoin’s trajectory could indeed be toward more significant losses.

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Brian Johnson
Brian Johnson
A dedicated Bitcoin journalist passionate about uncovering the latest trends, developments, and innovations in the world of cryptocurrency, while delivering engaging and well-researched articles to inform and educate readers on the dynamic digital finance landscape.
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