Filecoin [FIL], the decentralized digital storage platform built on blockchain technology, is gearing up for a notable uptrend after being range-bound for almost five months. The current market sentiment is predominantly bullish, with many cryptocurrencies witnessing breakouts and upward movements.
Analysis of Filecoin’s Technical Aspects and Key Thresholds
Amid this optimistic scenario, FIL has established a bullish price pattern on its daily chart, garnering substantial support from traders and investors alike.
According to technical analysis conducted by CryptoCrypto, FIL is on the brink of breaking out of a consolidation zone that has contained its movement for the past five months, oscillating between the $3.18 and $4.80 levels.
Recent price action and technical analysis indicate that if FIL manages to breach this zone and close a daily candle above the $4.80 mark, there is a high likelihood of it surging by as much as 47% and reaching the $7.20 threshold.
At the current moment, the asset is trading above the 200 Exponential Moving Average (EMA) on the daily chart, signaling an upward trend. Moreover, the Relative Strength Index (RSI) suggests a potential rally as it is in the oversold region.
Encouraging On-Chain Metrics for FIL
The upbeat technical analysis for Filecoin is bolstered by on-chain metrics. Traders have been notably active recently, leading to a substantial increase in open interest (OI).
As per data from the on-chain analytics firm Coinglass, FIL’s OI has surged by 7.9% in the past 24 hours and 4.65% in the previous four hours, indicating heightened trader involvement and a rise in open positions.
Currently, the key liquidation levels stand at $4.43 on the downside and $4.75 on the upside, with traders holding overleveraged positions at these levels, as per Coinglass data.
If the market sentiment remains unchanged and the price ascends to the $4.75 level, short positions worth nearly $1.5 million will face liquidation. Conversely, should sentiment shift and the price falls to $4.43, long positions worth approximately $6.21 million will be liquidated.
These on-chain metrics, coupled with technical analysis, indicate a prevailing bullish sentiment driving FIL and positioning it to overcome its resistance.
Currently, FIL is trading around $4.62, marking a 3.5% increase in the last 24 hours. However, trading volume has declined by 8% during the same period, suggesting reduced involvement from traders and investors compared to the previous day.