The price of Filecoin has shown a sharp rise over the past couple of days. In the last week alone, the altcoin is up over 80% and has broken several resistance levels. On the daily chart, FIL is up 24%.
In terms of development, Filecoin aims to launch Filecoin virtual machine (FVM) next month. This development will offer the possibility of smart contracts. This update will help increase and accelerate the value of the token in the coming days.
The technical outlook for Filecoin remains extremely optimistic given the significant uptick in demand. Buyers were plentiful as demand and accumulation for the altcoin rose substantially over the past two weeks.
However, it is still too early to predict if the price of Filecoin will continue to rise as a price correction cannot be ruled out. FIL needs to stay above several important price levels if the coin is to maintain a positive position.
The market capitalization of Filecoin rose, indicating that buyers were circulating in large numbers at press time.
Despite an 80% price increase, Filecoin is still trading 96% below its all-time high reached in 2021.
Filecoin Price Analysis: One-Day Chart
At the time of writing, FIL is trading at $9.21. The coin is stuck below the critical price resistance level of $6.36. Finally, with double-digit gains, Filecoin managed to break through the aforementioned price level and turn it into support for the coin. Immediate resistance for the coin was $9.80.
A move above the $9.80 level will take the coin to $10.70. Both $9.30 and $9.80 are important resistance levels. On the other hand, instead of FIL being able to break through the next resistance level, it should stay above two important support lines.
The vital support area lay between $7.40 and $6.30. FIL could drop to $5.69 if the price falls below $6.30. The amount of FIL sold in the last session was green, indicating an increase in purchasing power.
Technical analysis
Since FIL crossed the $7 border, the coin has been in the revaluation zone three times. At the moment, Filecoin is overbought. The Relative Strength Index was at 80, indicating that buyers dominated the altcoin.
Usually, the overbought tendency leads to some price pullback due to a price correction. In this case, Filecoin should stay above the $7.40 support line.
At the same time, the altcoin was above the 20-simple moving average (SMA) line, which meant that buyers dominated the price momentum in the market.
Other technical indicators showed that the bulls were in full force at the time of writing. The Moving Average Convergence Divergence indicator shows price momentum and change. The indicator formed green signal bars, which were associated with buy signals.
Buy signals are often accompanied by a further rise in price. The Directional Movement Index (DMI) records the direction of the price.
DMI was positive as the +DI (blue) line crossed above the -DI (orange) line. The Middle Direction Index (red) moved up around the 40 mark, indicating a bullish trend on the chart.
Credit : www.newsbtc.com
