Aggressive Filecoin bears might target this level next
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The former support at $4 buckled under the seller pressure last week.
- More losses for FIL are expected but the large imbalances on the chart could pose a threat.
The USDT (Tether) dominance continued to march higher as investors fled to stablecoins amidst the fear that gripped the market. The US SEC’s legal action against one of the largest exchanges by volume, Binance, sparked crypto outflows across exchanges.
Read Filecoin’s [FIL] Price Prediction 2023-24
This showed investors trying to brace for an uncertain future. The market value of most altcoins has taken a major hit in recent weeks. Filecoin has shed just over 30% within two weeks, and more losses are expected.
A continuation of the Filecoin downtrend will likely see prices fall below $3
The higher timeframe charts showed the bulls generally do not have much joy in attempting to rally prices. This has been so since September 2021. On the 4-hour chart as well, Filecoin showed a strong bearish trend in progress. The RSI agreed with this as it has been below neutral 50 for all of the past ten days.
The 50 and 100-period moving averages also showed downward momentum. Examining the market structure, a clear series of lower highs and lower lows present themselves in June. The attempted move upward past the $4.8 area in late May was convincingly quashed.
A set of Fibonacci retracement levels was plotted based on last week’s drop from $4.4 to $2.7. The 61.8% retracement level was tested as resistance. Moreover, a lower timeframe (H1) structure shift toward bearish was also seen.
On 13 June, on the 1-hour timeframe, FIL made a higher low at $3.54 and rose to $3.75 on 14 June. Over the past 12 hours, these gains were retraced and FIL fell below $3.54 again.
At the time of writing, FIL was below the 50% retracement level. Another bounce toward the $3.8 area was possible, but a continued slide in prices was more likely. To the south, the $2.7 level and the 23.6% extension level at $2.29 can be used to make profits.
The plunging Open Interest reflects overwhelming negative sentiment
The spot CVD was trending lower, with sharp drops on certain days. These drops accompanied flurries of selling activity that drove Filecoin prices downward. The Open Interest was also descending.
Realistic or not, here’s FIL’s market cap in BTC’s terms
This highlighted discouraged bulls in the futures market and was a sign of bearish sentiment. The funding rate also fell into negative territory on 10 June, but has climbed back above zero since then.