Filecoin Price Prediction: FIL rises back from the ashes, but its growth is not sustainable

  • 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.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Bank of America bullish comments on metaverse push Axie Infinity and Sandbox closer to breakout

Bank of America's strategist made bullish remarks about the metaverse, triggering a spike in interest in Axie Infinity and Sandbox tokens. The rices of the two metaverse tokens continue climbing with increased interest from investors. 

More Axie Infinity News

Polkadot price ready to breakout after DOT forms double bottom

Polkadot price began turning around and moving higher on November 28. It is currently resting on support after a brief pull-back, with the potential for using this floor as a launchpad higher. A resumption of the bullish impulse will provide fresh confirmation for the new uptrend.

More Polkadot News

Bitcoin Weekly Forecast: The bull and the bear case for BTC

Bitcoin price saw a recent bullish impulse that faced massive headwinds before it tagged a crucial psychological barrier. With directional bias and choppy price action, BTC is likely to experience massive volatility as the situation resolves over time. 

More Bitcoin News

Berkshire Hathaway’s Charlie Munger wants US to ban cryptos like China

Charlie Munger considers cryptocurrencies bad for people and backs China on its cryptocurrency ban.In his previous interviews, Munger has shed light on the concept of “speculative excess” and “asymmetry of wealth.” 

More Cryptocurrencies News

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!