After breaking out, the Filecoin price is at a crossroads. What happens next will dictate whether it’s the bulls or the bears who will prevail.
Filecoin is trading at $53.70, higher by 0.28% in the last 24-hours and 7.8% over the last seven days.
The cryptocurrency market as a whole is paring last week’s gains following Bitcoin’s reversal below $40,000 this morning.
Yesterday, the Filecoin price was closing in on $60.00. However, this morning, FIL is 10% lower, as it digests BTC’s latest failed attempt to clear $40k.
The recent price action has been encouraging, and in the last two weeks, Filecoin has increased its market cap to over $5 billion. Which ranks the coin as the 24th largest cryptocurrency, slightly ahead of 25th ranked Terra.
However, as is often the case with altcoins, if BTC continues to slide lower, FIL will likely follow. Therefore, traders should pay close attention to how the market leader performs this week.
The daily chart shows the 30% rally from the 22nd of July’s $39.98 low has forced FIL out of a three-month downtrend.
Furthermore, this reversal has also created a bullish double-bottom on the chart at $40.00, which is now a significant support level.
However, Filecoin remains below the 50, 100, and 200-day moving averages. Notably, yesterdays rally failed to clear the 50 DMA at $54.49 on a closing basis. Moreover, the average has again rejected the price this morning. Therefore, $54.50 should be viewed as the first level of resistance.
If FIL closes above $54.50 in today’s session, a logical target is $78.50-$80.00, where the price meets the resistance of the 100 DMA at $80.27 and the 200 at $78.46.
Although, a failure to breach the 50 DMA today may suggest the rally has stalled. And should BTC’s decline continue, the bears will be eyeing the $40.00 support.
Therefore, despite some encouraging technical developments, a Filecoin price prediction must consider the fate of the broader market. On that basis, until Bitcoin breaks free from $40,000, both $40.00 and $80.00 seem equally possible for FIL.
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