Filecoin: Deciphering reasons behind FIL’s unprecedented hike
- Filecoin’s price and volume surged exponentially in the last seven days.
- On-chain metrics were bullish and so were a few market indicators.
Filecoin [FIL] has grabbed the attention of many traders in recent days because of its current price action.
The token’s price increased by over 11% in just the last 24 hours while its volume shot up by over 130%. According to CoinMarketCap, FIL registered a weekly uptick of more than 77%, and at the time of writing, it was trading at $8.47 with a market capitalization of more than $3.29 billion.
A possible reason behind this unprecedented surge can be attributed to the hype around the launch of Filecoin’s FVM, which is expected to go live in March 2023.
The Filecoin Virtual Machine (FVM) is a runtime environment for smart contracts (also called actors) on the Filecoin network, which will bring user programmability to Filecoin, unleashing the enormous potential of an open data economy.
After the launch, Filecoin has planned the next major updates for the FVM, which will also release later this year.
Interestingly, FIL also recently completed its most successful hackathon to date. As per the official announcement, the hackathon ran from 20 January to 10 February and received overwhelming support from the developer community.
🚀The world's biggest #FVM hackathon🚀
In anticipation of the FVM launch, the Filecoin community completed its most successful hackathon to date for devs kicking off building with FEVM! Project submissions included use cases like DataDAOs, DeFi & more!👇 https://t.co/Ri0x7WS15L pic.twitter.com/tuKnMa0utT
— Filecoin (@Filecoin) February 19, 2023
Read Filecoin’s [FIL] Price Prediction 2023-24
Metrics backed the hike
Filecoin’s on-chain metrics revealed that as its price soared, the token’s demand from the derivatives market also increased.
As per Santiment’s chart, FIL’s Binance and DyDx funding rates were up, reflecting its demand. FIL’s development activity also increased during the last week, but towards the end, it registered a decline.
FIL’s market dominance increased by more than 62% last week as a result of the price increase.
Realistic or not, here’s FIL market cap in BTC’s terms
Does the future look good?
Though the last week has been very bullish, things might change in the near term. According to CryptoQuant, Filecoin’s Relative Strength Index (RSI) was in an overbought position, at press time, which was a massive bearish signal.
Let’s have a look at FIL’s daily chart to better understand which direction FIL was headed. Like RSI, FIL’s Money Flow Index (MFI) was also in the overbought zone.
On top of that, FIL’s Chaikin Money Flow (CMF) seemed to have flattened, increasing the chances of a trend reversal soon.
Nonetheless, the Exponential Moving Average (EMA) Ribbon revealed that the bulls were still leading as the 20-day EMA was above the 55-day EMA. FIL’s On Balance Volume (OVB) registered an uptick, which also looked bullish.