Filecoin (FIL) has been experiencing a downward trend in its price for most of this month, but the decline has recently come to a halt. Despite this, investors may not be feeling optimistic about the future of the asset. The consistent drop in Filecoin’s price has led to $20 million in long liquidations since the start of June, causing a bearish sentiment in the market. This has prompted many investors to step back, with Open Interest declining by 28% within a short period of eight days. Filecoin’s high correlation with Bitcoin, at 0.90, means that when Bitcoin experiences a downturn, Filecoin is likely to follow suit.
The high correlation with Bitcoin has been a disadvantage for Filecoin investors, especially as Bitcoin is currently in a bearish phase. The uncertainty surrounding Bitcoin’s performance is making investors more cautious about Filecoin. Despite this, Filecoin’s price may encounter resistance while trying to recover, currently trading at $4.3. If the altcoin can surpass the resistance at $4.6, it may have a chance at reclaiming $5.0 as support and pushing towards $5.6, marking a critical resistance level for potential rally. However, failure to breach $5.6 could result in consolidation above $4.6 or even a drawdown below $4.2 in bearish conditions, which would invalidate the bullish outlook.
It is crucial for investors to exercise caution and conduct their research before making financial decisions based on market analysis. As per the Trust Project guidelines, this price analysis is for informational purposes and should not be taken as financial advice. Market conditions are subject to change, and it is advisable to consult with a professional before making any investment decisions. BeInCrypto remains committed to providing accurate and unbiased reporting on market trends, but it is essential to stay informed and aware of the risks involved in cryptocurrency trading. Stay updated with the latest news and market trends to make informed decisions.
