Filecoin Price: Hinting At Bullish Breakout — Is It A Buy?
PATNA (CoinChapter.com) — The Filecoin price might be looking at a bullish breakout following its nearly two years of accumulation, with analysts speculating on FIL starting a bull run.
The decentralized storage network’s native token has been in an accumulation phase since May 2022, crabbing below $9.5. An X-based crypto analyst, “CryptoBullet,” stated that the accumulation phase of the Filecoin token might be nearing its end.
A relative equilibrium between supply and demand, where the price stabilizes or moves within a narrow range, helps identify the accumulation phase of an asset. Often, the accumulation phase absorbs a substantial portion of the token’s supply, which could help push an asset’s price higher.
CryptoBullet set $17 and $25 as his resistance levels should FIL price break into a bull run. However, the accumulation breakout is not the only bullish cue favoring Filecoin prices.
FIL Price Paints Bullish Triangle Pattern
Meanwhile, Filecoin price formed a bullish technical pattern called the ‘Ascending Triangle.’
A horizontal trendline that connects swing highs and an ascending trendline connecting swing lows form an ascending triangle pattern. Volume helps determine if a breakout is strong. FIL price action within the triangle appears to be testing the resistance level multiple times, indicating a buildup of buying pressure.
Under ideal conditions, buyers would enter the market as the trendlines close the gap. As a result, the toke’s price would push above the horizontal resistance with heavy volumes.
Per the rules of technical analysis, the price target for a breakout is equal to the triangle’s height at its thickest point. If the triangle pattern pans out, the FIL price has a theoretical price target near $37, a spike of nearly 407% from current levels.
Overbought RSI Forces Price To Check Growth
The recent rally pushed FIL price’s relative strength index — a momentum indicator that measures the magnitude of recent price changes — above 70, scoring 81.18 on the daily chart, resulting in overbought conditions for the token.
Overbought RSI levels usually precede a bearish reversal or a consolidation phase for an asset, which is why traders consider the occurrence a sell signal.
Bears aggressively defend the supply wall near $7.8, evident from the long upper wicks on the recent daily candles. However, breaking past the immediate resistance could help Filecoin price rally to $9, near the triangle resistance, before correcting.
On the other hand, if the rally fails, FIL price is likely to drop to the support near $7. Moreover, failure of the immediate resistance level might force Filecoin’s price to test the support near $6.
The post Filecoin Price: Hinting At Bullish Breakout — Is It A Buy? appeared first on CoinChapter.
Filed under: Bitcoin - @ February 20, 2024 10:08 pm