• Filecoin managed to regain most of the losses during a strong weekend rally.
  • The fundamentals are still clouded, making the growth unsustainable.

Filecoin has been gaining ground rapidly since the weekend. The token has recovered from as low as $20.63 to $40.8 in less than three days amid significant buying interest in China. At the time of writing, FIL/USD is changing hands at $38.3. Despite the retreat from the recent high, the coin is still 15% higher on a day-to-day basis. As compared to the previous Monday, October 19, FIL's price has increased by over 23%.

Notably, during the weekend, Filecoin was one of the worst-performing coins with double-digit losses amid miners exodus from the network; however, the luck smiled on it.  

Currently, Filecoin takes 21st place in the global cryptocurrency market rating with a current market capitalization of $821 million and an average daily trading volume of $329 million. The coin is most actively traded on Binance and Huobi against USDT. 

Filecoin rocks in China

Filecoin faced lots of issues with miners after the launch of its main-net on October 15. The participants complained about the unsustainable economic model. Many miners were forced to throw in the towel as they could not reach full capacity without having lots of FIL coins at the start.

To address the issues and support miners at the initial stages, the project team launched a new loan program. According to Colin Wu, a Chinese cryptocurrency reporter, the new lending mechanisms helped stop the miners' exodus. Many people locked their positions and reduce selling pressure on the FIL.

The expert also noted that the team held an event in Shanghai, which might have also attracted attention to the coin. However, the sustainability of the rally is under question as the long-term perspectives are still clouded. Miners will start disposing of their coins to cover the equipment's expenses, meaning that the selling pressure will eventually increase. 

FIL/USD: Bulls taking a break below $40

From the technical perspective, FIL/USD is moving inside the channel limited by the recent high of $40 on the upside and the local support of $34.4. This barrier is reinforced by the short term EMA located on approach. Notably, this support served as a backstop during the correction on Sunday.

A sustainable move below $34.4 will increase the selling pressure and bring $30 into focus. It served as channel support for the price on October 19-21, before the new bearish wave took the price to the historic low of $20.63.  

FIL/USD 1-hour chart

On the upside, once $40 is out of the way, the upside is likely to gain traction and take the price to the next resistance of $43 and a psychological $50.

Key levels to watch

While FIL remains bullish as long as the price stays above $34.4, long-term growth looks unlikely at this stage due to the clouded fundamentals. On the other hand, a sustainable move above $40 will improve the short-term technical picture and allow for an extended recovery towards $50.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: BTC’s Q3 close and what to expect in Q4?

Bitcoin Weekly Forecast: BTC’s Q3 close and what to expect in Q4?

Bitcoin price is trading above two crucial levels, suggesting a stable foothold. Combining this outlook with a bullish divergence signal, BTC holders should expect a favorable outcome. However, since the third quarter will end in a few hours, there is bound to be abnormal volatility in the market, which could trigger massive moves in either direction, so investors need to be cautious. 

More Bitcoin news

Shiba Inu price: Shiba Eternity download day the biggest bullish catalyst in SHIB history?

Shiba Inu price: Shiba Eternity download day the biggest bullish catalyst in SHIB history?

Shytoshi Kusama, the project lead for Shiba Inu, has dropped a teaser about Shiba Eternity for the SHIB community. Proponents expect the launch of the collectible card game to be a bullish catalyst for SHIB.

More Shiba Inu News

Staking is coming to Chainlink this December as LINK price stands firm

Staking is coming to Chainlink this December as LINK price stands firm

LINK is trying to find its feet in the wake of declines that followed its rejection from resistance at $8.40. Bulls have managed to sustain a generally up-trending market and Chainlink is up nearly 17.50% from its September low at $6.56.

More Chainlink News

Ethereum Classic bulls take charge, a retest of $30 on the cards

Ethereum Classic bulls take charge, a retest of $30 on the cards

Ethereum Classic price ranges with no directional bias in sight. This trend could continue unless Bitcoin decides to do something. Regardless, investors should prepare for a minor downtrend before ETC rallies. 

More Ethereum Classic news

Bitcoin: BTC’s Q3 close and what to expect in Q4?

Bitcoin: BTC’s Q3 close and what to expect in Q4?

Bitcoin price has developed a bullish divergence with RSI, hinting at more upside. Despite the optimistic technicals, investors should expect volatile swings before the end of the third quarter of 2022. 

Read full analysis

BTC

ETH

XRP