Filecoin [FIL] Down By Over 50%; Is Filecoin Losing Steam?

Just a day after Filecoin announced its much-awaited mainnet launch on the 15th of October at block 148,888, Binance revealed ending the zero-interest promotion for borrowing FIL  and its interest rate will be adjusted as per market requirements. This news comes just hours after Binance enabled Isolated Margin trading for FIL and two other assets.

Notably, the zero-interest promotion for borrowing for the other two assets has not been cut short.

#Binance Margin interest rate adjustment for @Filecoin $FILhttps://t.co/zM2cf8NKgI

— Binance (@binance) October 16, 2020

Price action lose steam

The decentralized storage system’s native FIL token noted an impressive three-digit rally even before the delayed mainnet launch. Following the footsteps of Kraken and Gemini, leading crypto platforms such as Binance and Coinbase flocked in as the network’s popularity bolstered. Since reaching a peak of $114.32, the token slashed more than half of the gains over the past 24-hours. Following this, FIL fell to a value of $52.86 at the time of writing.

The ongoing downside correction is showing no signs of stopping as it broke below the $60.00 support could have acted as a strong buy zone and subsequently pushed the price higher. An upside break to $65.00 and $70.00 resistance levels, does not seem likely. The Coinbase and Binance listing failed to provide further bullish swings for the FIL token.

Community members’ reaction

It’s not just the price that took a backseat. The soaring popularity and the cryptocurrency exchanges swarming in to list the coin did little help to alleviate the skeptical bunch of the community. Coingape had earlier reported that Bitcoin proponent, John Carvalho criticized and asked the community if someone could articulate the need for the token for the purpose of cloud storage.

The latest price action of the token, however, has been the talk of the town. Talking about FIL’s downturn and significant losses, this is what Bitcoin maximalist ‘WhalePanda’ had to say

The Filecoin launch is going to be like the ZCash launch, or for the newer people: Grin. Very small supply the first couple of hours/days. The lowest vesting period was 6 months.
Price will start high and then there will be endless dumping for years.

— WhalePanda (@WhalePanda) October 15, 2020

Will Harborne, the CEO of DiversiFi also echoed a similar sentiment and questioned who was buying the token in the first place. He went on to say that is “hard to tell” if Filecoin was being promoted purely because of the tech but not endorsing FIL, and who has juicy “advisor / early-investors allocations in the pre-sale”. In either way, Harborne believes that it was not helping the Filecoin ecosystem.

Despite a few mixed responses, several community members were looking forward to Filecoin’s mainnet launch. Erik Voorhees, the CEO of Shapeshift congratulated Filecoin’s parent company, Protocol Labs, and stated,

“Yeah, it’s got a boring name, but this is easily one of the most professionally built, carefully-executed, and *valuable* projects that has emerged from the ICO era.”

An exit scam?

But it was the main man of the Tron Fooundation’s, Justin Sun, whose comments created a buzz. He questioned if there was an exit scam of Filecoin and accused Filecoin project founder Juan Benet. He further alleged that FIL tokens were dumped to the exchanges without community consent and added that the investors in the exchange, especially United States investors, should make sure Benet is held responsible for this under the protection SEC Enforcement.

Exit scam here? 1.5 million $FIL for 200 USD each worth 300 million USD at the high. Now price is below 60 USD. 70% down. No lock-up. No announcement to the community. How much do you sell? @juanbenet @Filecoin Is this ok? @VitalikButerin @SEC_Enforcement https://t.co/qYqJzgolyX pic.twitter.com/hGpMvDxSMO

— Justin Sun???? (@justinsuntron) October 16, 2020