Filecoin Tanks, Traders Should Short At These Levels

The Filecoin price has performed remarkably over the last week. Over the last 24 hours, however, the Filecoin price was caught In the previous as it fell by 1%. The coin logged more than 40% appreciation in that time frame.

The technical outlook of the altcoin pointed towards bullishness. Since FIL was rejected at the $9 price level, the altcoin’s momentum has slowed. Demand, however, registered a fall. This decrease in demand and accumulation could be attributed to Filecoin’s price correction.

If demand remains consistent without falling on the chart, then bulls still have enough room to run. It is yet to be seen if Filecoin price will attempt to topple over its immediate resistance or if it will travel south to trade near its nearest support.

It is safe to say that FIL has secured the $7 mark as solid support for its price. A drop below that level may bring the bears back for a while. If Bitcoin and the broader solid attempt to move north, FIL will receive a much-needed boost to turn its price around.

Filecoin Price Analysis: One-Day Chart

FIL was trading at $7.99 at the time of writing. The immediate resistance for FIL was $8.30. The $7 level is currently acting as a line of support for Filecoin. The chance of a price correction extending further cannot be ruled out as the coin trades laterally.

In the event of demand falling further, Filecoin may fall to $7.90, then to $7.70, and finally to $7.40. All these levels above could act as shorting opportunities for traders.

The amount of Filecoin traded in the last session declined, which meant that sellers were trying to depict an entrance into the market.

Technical Analysis

FIL has visited the overbought zone three times since the beginning of this year. Every time the coin faced a retracement from that level, which is considered usual. The Relative Strength Index stood at the 70-mark, which was still a sign of increased demand but with a downtick.

If the coin continues losing demand, FIL will soon trade at its closest support line. The technical structure remains bullish for the altcoin. Filecoin price was above the 20-Simple Moving Average, meaning buyers were driving the price momentum in the market.

Other technical indicators have also pointed towards bullish momentum on the chart. The Moving Average Convergence Divergence, which indicates price momentum and trend change, formed green signal bars. The green signal bars are tied to an increase in price.

The Directional Movement Index reads the price direction. The indicator was positive, as the +DI (blue) line was above the -DI (orange) line.

The Average Directional Index (red) rose above the 40-mark, which implied that the current price momentum was building, which would benefit the bulls.

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