Filecoin value drops 5% in last 7 days: Can the descent continue?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Filecoin has performed well in early December but the bulls have been forced to retreat.
Swing traders can wait for a move to or just beneath the range lows before bidding.
Filecoin [FIL] has not run linearly higher like many of its altcoin brethren. While it did post large gains in November and early December, the uptrend has been halted at a crucial higher timeframe resistance.
AMBCrypto’s technical analysis of FIL showed that the bullish momentum of the asset was weak and that a move downward was likely. A look at the estimated liquidation levels as well as the price action of the past few weeks illuminated where the bulls could make a stand.
The range coincides with an HTF resistance zone
The area from $4.61 to $5.71 represented a bearish breaker block on the one-week chart. The 12-hour chart above showed that FIL bulls faced difficulty breaching this zone of resistance in mid-November.
A month later, they are still unsuccessful. The price has formed a range (white) that extended from $4.33 to $5.47. The mid-range mark acted as resistance in recent hours and rebuffed FIL bulls’ latest attempt to climb higher.
The RSI also slipped beneath the neutral 50 mark in the past few days to suggest that momentum had shifted bearishly. The On-Balance Volume (OBV) was also in decline.
A move to the $4.5-$4.6 area, or a move above mid-range $4.9 would offer a buying opportunity.
Liquidation levels heatmap also offered evidence for a small move higher
Source: Hyblock
The liquidation levels heatmap of the past three months from Hyblock offered some interesting insights.
AMBCrypto’s analysis of the chart above showed that the $4.9-$5 area would see some liquidations triggered. This could attract prices just above the mid-range resistance before a reversal.
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To the south, a huge band of liquidity is available at the $4.28 level. This corresponded to the low that Filecoin formed on 21st November, when it dropped significantly below the range lows before recovering.
Hence, another drop to the $4.3 region would offer a good risk-to-reward trade for bulls.
Filed under: Bitcoin - @ December 16, 2023 1:30 am