Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Filecoin has a short-term and long-term bearish outlook
- A bounce to $3.5 was unlikely but could present an ideal trading opportunity
Filecoin [FIL] rallied from $3 over the past three weeks and was trading at $3.3 at the time of writing. It ran into some selling pressure beneath the $3.5 resistance zone, and the volume indicators showed bulls were weakening.
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A previous higher timeframe analysis of Filecoin by AMBCrypto highlighted the long-term downtrend that FIL had been on and suggested a drop below $3 was likely. Instead, we saw a rally and a revisit of the $3.45 mark, which was just below another HTF resistance zone. Here’s what traders can prepare for in the coming days.
The dip below $3.3 meant bears have the upper hand for now
The H4 market structure had been bullish last week, but the drop below $3.3 on 3 October shifted the structure bearishly. Moreover, the Relative Strength Index (RSI) also slipped below the neutral 50 mark. Together, they showed that FIL is likely headed lower.
This finding is backed by the On-Balance Volume (OBV), which has been in a steady downtrend since late August. Even when Filecoin climbed from $3 to $3.45, the OBV did not show a significant uptick to reverse the previous trend.
At the time of writing the OBV continued to drop lower. Hence, it was likely that FIL was headed lower. A short trade was viable, but it would be even more likely to succeed if FIL prices retest the $3.5 bearish order block (red box) from the 1-day chart.
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Author: Akashnath S
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