Here’s Why Fast-Recovering Filecoin Price Is Under Correction Threat

The Filecoin (FIL) price witnessed a significant inflow this week, registering a 70% gain from the February 14th low($4.75). The ongoing bullish trend may be attributed to the upcoming release of Filecoin Virtual Machine (FVM), said to bring smart contracts and user programmability to the Filecoin blockchain. However, the price action today shows a long-wick rejection indicating the exhausted bullish momentum. Therefore, a minor pullback could assist buyers to replenish the bullish momentum.

Key Points:

• A higher price rejection candle at $0.974 indicates hit overhead supply pressure is high
• A potential correction may discount the FIL price by 20%.
• The intraday trading volume in Filecoin is $1.5 Billion, indicating a 69% gain

Source- Tradingview

The Filecoin market prices were trapped in a consolidation phase after a bullish rally in the early days of 2023. The consolidation phase resulted in a sideways trend in February between $4.8 and $5.8 with the support of a 100-day EMA. 

However, as the market stabilized and buying pressure recuperated at the 100-day EMA and $4.8 support level resulted in a bullish breakout. The breakout rally crossed the 200-day EMA and the $5.86 mark accounting for a 58% jump in the last three days. 

Also Read: Explained: What is Physical NFT? and How to Sell Physical Items as NFT

The price action displays a higher price rejection in the daily candle but the intraday growth of 12% maintains an overall bullish impression. Hence the uptrend in the FIL prices is expected to continue and reach $10.7 which will account for a further growth of 26%. 

However, exhaustion in buying pressure can fuel the higher price rejection and result in a retest of $5.8 before continuing the prevailing trend.

Technical Indicator

EMAs: The rising FIL coin breached the 200-day EMA slope indicating an early sign of trend reversal.

RSI– The daily RSI slope approaching the overbought region indicates the price may need a minor correction to replenish bullish momentum.

Filecoin Price Intraday Levels-

• Spot rate: $1524
• Trend: Bearish
• Volatility: Medium
• Resistance level- $1680 and $1788
• Support level- $1500 and $1420