- Filecoin battered bulls bow to the overhead pressure after losing the ground above $80.
- Short-term support at $42 allows bulls to take control, but gains above $50 are key to sustaining the uptrend.
Filecoin has, over the last couple of months, slashed a substantial amount of its value from the record high of $238.5, accomplished on April 1. At first, bulls sustained the price in a range between $120 and $180. However, the crash in May led to more losses below $100 before formidable support was established at $54.5.
Note that FIL recovered toward $100 in the first week of June. Nevertheless, intense seller congestion at $100 absorbed the buying pressure. The retracement from the failed attempt has since progressed into the ongoing crypto selloff, whereby Filecoin extended the down leg to $42.
Filecoin secures crucial support ahead of recovery to $100
Filecoin is dancing at $48 after ricocheting from the recent support at $42. The token’s immediate upside has been limited to $50. However, closing the day above this level is essential for the resumption of the uptrend.
The Relative Strength Index (RSI) reveals that Filecoin is oversold. This technical tool follows the asset’s trend and calculates its strength. A dip into the region below 30 insinuates oversold conditions. In other words, FIL is trading below the actual market value and bulls are likely to take control. As the RSI lifts from the oversold areas, massive buy orders are anticipated. Thus, supporting the initial phase of the recovery.
FIL/USD 12-hour chart
Filecoin’s impending recovery is augmented by a couple of buy signals presented on the four-hour and 12-hour charts by the TD Sequential indicator. This technical tool is developed to anticipate precise market turning points.
A buy set up occurs in a nine candlestick validated when a high of any day on or after the eighth day of the formation must be higher than the low of any day three or more days earlier. In other words, the ninth and either candlestick must close below the low of the seventh and sixth candles. This infers that the downtrend is fading and buyers are getting ready to take the mantle.
FIL/USD four-hour chart
Looking the other side of the fence
The Moving Average Convergence Divergence (MACD) has a bearish signal that may be amplified if the support at $50 is not reclaimed in the short term. With the indicator below the zero line, bearish pressure cannot be ignored. Therefore, overhead pressure could soar under $50, sending Filecoin back to the support at $42.