After more than 8 months of decline, Filecoin (FIL) has denied buyers the right to correct the trend. With the current market structure certainly helping sellers, the bears jumped into price discovery to find newer lows.
With the recent plunge, Alt tested the 6-month trendline support (white, dashed line). A strong closing below this level could lead the FIL into a quest for newer all-time lows. At press time, FIL was trading at $10.12, down 16.84% in the last 24 hours.
FIL daily chart
Over the past eight months, FIL has lost more than 91% of its value and has plunged relatively quickly into the $10 area. On the other hand, the alt saw a bullish nullification during the daily timeframe as it fell below the downward channel (white).
A recent decline from the $28 level kept the FIL below the 20 EMA (red) and 50 EMA (turquoise), while sellers continued to look for fresher evidence. Naturally, the south-facing Supertrend stayed in the danger zone for a month. In addition, FIL this fall reached an all-time low of $10.1 on May 11th.
Current candlesticks are important to fairly determine the trajectory of future movements. A continued closing below the lower trendline of Pitchfork and support for the 6-month trend line will open the door to long-term bearishness. Bulls, on the other hand, can find it very difficult to reverse resistance in the $11.3-$11.7 range unless they increase their buying volume.
The FIL’s RSI has now entered oversold territory for over two days. A strong break below the 26 line could be a serious obstacle to a short-term recovery opportunity. An eventual rebound from this indicator could lead to a stronger resurgence on the price chart.
Interestingly, OBV has found a higher peak over the past few days. So, following the price movement, we turn bullish and maintain some hopes of recovery.
All in all, bears exercised tremendous control over the current trend. So, a fall below the trendline support can turn into immediate resistance and cause further losses. If sellers step back, the $11 area will continue to place obstacles before there is any realistic recovery opportunity.
Finally, keeping an eye on Bitcoin’s movements and broader sentiment will be important to complement the aforementioned analysis.