Analysis of Filecoin: FIL Charts a Path to $10 with Challenges Along the Way
Filecoin has been making headlines this week due to its significant price increase. The week started with low trading volume, causing concern among traders. However, the coin experienced its first notable positive change on Tuesday, dipping to $4.75 before surging to $5.10 and closing with a gain of over 4%. Wednesday saw bullish sentiment as the coin attempted to break the $5.5 resistance, ending the day with gains of over 7%. Although the $5.5 barrier was breached the following day, strong rejection at $6 prevented further gains.
The main highlight of the week came on Friday when Filecoin reached its highest point in over five months, registering its largest positive change in over a year. Opening at $5.41 and closing at $7.62, the altcoin saw a staggering 40% increase.
In the current intraday session, Filecoin has attempted to continue its upward trend, opening at $7.52 and reaching a high of $9.5, surpassing the $9 barrier. However, it faced strong rejection at its peak and is currently trading at $8.48 at the time of writing.
With a 72% increase so far, the performance of Filecoin in the coming days has become a central focus. Let’s take a closer look at its current state.
Filecoin is currently overbought, as indicated by the Relative Strength Index (RSI) breaking above 70 during Friday’s action and remaining at 78 at the time of writing. Despite this, the bullish sentiment continues, and there is a bullish divergence on the Moving Average Convergence Divergence (MACD), suggesting that the coin is still positive and may overcome more resistance. However, there are signs of an impending correction.
While Filecoin is overbought, it serves as a reminder that a downward trend is likely. However, the MACD is not showing any bearish signals at the moment. The 50-day Moving Average is on an uptrend and may intersect with the 200-day MA if current conditions persist. With a golden cross on the horizon, Filecoin is on track to overcome key negative barriers.
In terms of key levels to watch, Filecoin may reach $10. Key support levels include $4.60, $4, and $3, while key resistance levels are at $9 and $11.5.
Analyzing the chart, it is clear that the current run is not strongly supported, as positive barriers are distant from the current price action. This suggests that the coin may experience a free-fall until it finds support at established levels or creates new ones. However, the $8 support level is worth considering based on previous price movements.
The first level to watch is the $4.60 barrier, which held strong when tested last week. If this level is breached, the $4 support level will be the next to watch. This level served as a strong barrier for over three months before being broken in December. In a worst-case scenario, the $3 support level may be reached, which is a long-term and formidable barrier.
On the resistance side, Filecoin faced strong rejection at $9.5, causing a retracement below $9. To regain momentum, the altcoin must reclaim this level. If it manages to stay above $9 consistently, there is a high chance of flipping the $10 barrier. Additionally, an attempt may be made to break the $11.5 barrier.
In conclusion, Filecoin’s recent surge has caught the attention of many, but its current state indicates the possibility of a correction. While the altcoin is overbought, it still shows positive signs and may overcome resistance levels. However, support levels should be closely monitored in case of a free-fall. On the resistance side, Filecoin must reclaim the $9 level to continue its upward momentum and potentially reach $10 or even $11.5.
