FIL could offer a buying opportunity if it tests the $3 support. Here’s why…
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- Filecoin lacks a strong trend on the 12-hour and daily charts
- The range-bound price action showed traders low-risk areas to buy and sell FIL at
Filecoin [FIL] fell below the $3.3 mark on 21 September and its short-term price outlook flipped bearishly. Yet, the higher timeframe price charts showed the token lacked a strong asset over the past month.
How much are 1, 10, or 100 FIL worth today?
This lack of a trend was unlikely to change anytime soon. There were two areas of interest for swing traders to focus on and FIL price action can be treated as a range. What would be needed to spur a bullish breakout?
A sharp bounce from the $3 level marked a pocket of liquidity
On 17 August FIL dropped to $3.03, a level marked by the white dotted line. The same level was tested on 11 September but the price did not close the 12-hour trading session below the $3 mark, though it dipped to $2.95 before a bullish reversal.
At the time of writing, the market structure of FIL on the 12-hour chart was bearish but weakly so, given the range-bound price action of the past month. There was a bullish order block at $2.95-$3.07. There was also a bearish order block that extended from $3.49-$3.55. Hence, these are the two regions where traders can look for longs and shorts respectively.
The Relative Strength Index (RSI) was below neutral 50 and showed bears had an advantage in terms of momentum. The On-Balance Volume (OBV) was at a local resistance but a breakout would be encouraging for buyers, who can still wait for FIL to approach $3.
The Directional Movement Index (DMI) showed no significant trend in progress. Thus, highlighting the range-bound nature of Filecoin since August.
There was a distinct drop in Open Interest in recent weeks
From 17-20 August, Filecoin slipped below $3.6 and retested the same region as resistance, forming the bearish order block. Since then the Open Interest (OI) has been subdued, although it did see a few days with noticeable spikes.
Realistic or not, here’s FIL’s market cap in BTC’s terms
From the OI we can infer that speculators were not ready to bet aggressively on Filecoin yet. A breakout past $3.6 could see the OI surge, but this could take days or weeks to materialize. In the meantime, traders could look to trade the range.