Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Filecoin has a bearish view on the short and long term
- A jump to $3.5 was unlikely, but could provide an ideal trading opportunity
Filecoin [FIL] rose from $3 in the last three weeks and was trading at $3.3 at the time of writing. It experienced some selling pressure below the $3.5 resistance zone, and the volume indicators showed that the bulls were weakening.
Is your portfolio green? View the Filecoin Profit Calculator
A previous analysis of higher time frame Filecoin by AMBCrypto highlighted the long-term downtrend that FIL had been experiencing and suggested that a drop below $3 was likely. Instead, we saw a rally and a return to the $3.45 mark, which was just below another HTF resistance zone. Here’s what traders can prepare for in the coming days.
The dip below $3.3 meant that the bears have the upper hand for now
Source: FIL/USDT on TradingView
The fourth quarter market structure was bullish last week, but the drop below $3.3 on October 3 caused a bearish change in the structure. Moreover, the Relative Strength Index (RSI) also fell below the neutral mark of 50. Together, they showed that FIL is likely to move lower.
This finding is supported by On-Balance Volume (OBV), which has been on a steady downward trend since late August. Even when Filecoin climbed from $3 to $3.45, the OBV did not show a significant increase to reverse the previous trend.
At the time of writing, the OBV continued to trend lower. So it was likely that FIL went down. A short trade was feasible, but the chances of success would be even higher if FIL prices retested the bearish order block at $3.5 (red box) on the 1-day chart.
The Open Interest showed impartial speculators
Source: Coinalyse
The Open Interest (OI) chart showed a rapid decline on October 2 as prices fell to $3.45 after the reversal. The conclusion was that market sentiment had turned bearish and long positions were discouraged.
Realistic or not, here is FIL’s market cap in BTC terms
The spot Cumulative Volume Delta (CVD) chart, like the OBV, has fallen over the past week. The CVD reinforced the idea that Filecoin lacked significant demand despite Bitcoin’s recent rebound [BTC] prices where other altcoins performed well. Therefore, buying FIL could be risky in the coming days.
