Filecoin Price Prediction as FIL Pumps Up 70% in 7 Days – Is China Buying?
Leading decentralized storage protocol Filecoin (FIL) undertook a magnificent 75% rally over the weekend.
This marks a break to half a year of suppressed price action for the once highly prized cloud-storage asset.
Filecoin is currently trading at $8.59 (+1.45% in the last 24 hours).
February 17 saw a huge breakout from the consolidatory price action that had ranged from $5.00 – $5.50 for over a month.
As Friday evening arrived, hammering green candles started to paint across the chart, riding high on the back of the push up to $24,500 by Bitcoin (BTC) last week.
The rally continued all weekend until it finally stalled just shy of $10 on Sunday.
This is a level not seen since August 2022 – more than six months ago.
Reclaiming the $10 mark is a key target for FIL, which is down to single digits, a fall from grace for a coin once trading at $237.
Localized price action over the past 24 hours is reeling as bulls rush to gather support and consolidate the newfound gains.
Indeed, consolidation does seem to be finding legs around $8 – a minor retracement of -10% from the local top.
With price action firmly glued to the top of FIL’s trading channel, sentiment seems bullish.
Could Filecoin (FIL) rally push higher?
However, looking at the indicators challenges this theory.
The RSI 14 pushed to the extreme as it heated up during the weekend rally. Hitting a scary top of 85 – this was a clear overbought signal.
And things haven’t calmed down yet. Despite the local retrace and supportive consolidation, the RSI hasn’t cooled off significantly, still sat high at a current 76.
This is a clear bearish signal and could indicate a drop-down to test the lower support trendline. The lower trendline hasn’t been tested in almost an entire week.
Filecoin’s MACD further solidifies this angle, with this indicator too showing bearish divergence. The local retrace has seen the MACD drop from soaring heights at 0.162 on the weekend, to -0.023 now.
Despite the bullish rally and Filecoin’s historically-demonstrated upside potential, localised action seems to signal the potential for a breakdown to test support further.
The downside risk from here is not insignificant, with a fall likely to land back at the lower support level around $5.50. This would represent a -34.96% move to the downside.
Upside potential if $10 can be flipped to support is not insignificant either, with historical resistance levels from May 2022 suggesting $11.50 could be the next stop (+35.98%).
Overall then, Filecoin’s short time frame (STF) Risk: Reward ratio sits at 1.03. With upside potential and downside risk roughly proportional – this is a 50/50 toss-up. It could be worth waiting for a better entry.