Filecoin dips 10% in an uptrend- Should you buy FIL now?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Filecoin bulls faced rejection from a higher timeframe resistance zone at $5.5.
- Analysis of the liquidation levels showed where the FIL market could pivot.
Filecoin [FIL] is ranked 31st on CoinMarketCap. It saw a 4.5% increase in trading volume in the past 24 hours. In the past 25 days, FIL has gained 36% in value. It climbed from $3.52 to $5.66 in three weeks before retracing to $4.7 at press time.
Over the past week, FIL has encountered some trouble climbing above the resistance zone that stretched up to $5.7. With Bitcoin [BTC] trading above $37k, can FIL bulls’ fortunes change?
The former higher timeframe support was a resistance that bulls were fighting hard to conquer
The $4.61-$5.72 region was highlighted by a red box because it was a bearish order block on the one-week chart. This resistance zone has been in place since June.
In the past week FIL reached a high of $5.66, but was forced to retreat beneath the $5 mark.
The On-Balance Volume (OBV) also hit a ceiling and was unable to post new highs. Despite the strong bullish momentum in October and the first half of November, the bulls have been forced to retreat.
The Chaikin Money Flow (CMF) saw a huge dip but still showed a value of +0.09 to indicate buyers were strong.
The dip below $5 meant a revisit to the $4.22 local support level was a possibility. On the other hand, the $4.8 level was significant on the higher timeframes.
If the bulls can defend the $4.6-$4.8 region, another rally could commence.
The liquidation levels showed a sweep of $5.7 could be attractive to traders
AMBCrypto’s analysis of the liquidation levels heatmap revealed that a move to the $5.7 level was a strong likelihood.
Just over $300 million worth of liquidations could be triggered should Filecoin reach $5.71-$5.76, based on the one-month lookback period.
Is your portfolio green? Check the FIL Profit Calculator
After such a move, a reversal would be likely. The $5.7 area was still part of the weekly bearish order block.
Hence, holders of FIL could think about securing profits and waiting for a pullback toward $4 to buy more. With BTC at the $37.5k resistance, a dip for BTC could hurt FIL as well.