• Filecoin [FIL] has seen double-digit appreciation over the past few weeks, rallying by 50% in the past seven and 30 days.
• The major driving factor for the recent uptrend was a planned expansion to include a Filecoin virtual machine (FEVM).
• However, FIL dropped by over 10% in the past 24 hours due to macroeconomic uncertainty.
Recent Price Increase of Filecoin [FIL]
Filecoin [FIL] has seen double-digit appreciation in the past few weeks, with its price rising by 50% in the past seven and 30 days. The major driver of this rally was an upcoming expansion to include a Filecoin virtual machine (FEVM).
Short-Term Correction Due To Market Uncertainty
However, FIL saw a sharp correction of more than 10% within 24 hours due to market uncertainty and potential hawkish stance from the Federal Reserve if inflation continues to persist. The Personal Consumer Expenditure (PCE) that will be released on Friday is an important tool used by the Fed to track inflation and could determine its policy stance during March’s FOMC meeting. This event could influence FIL’s price action throughout Q1 2023.
Short-term Bearish Outlook
A rejection at $9.181 sent FIL tumbling down 17%. Its short-term recovery was aided by support at $7.708, but it still faces obstacles ahead. If Bitcoin falls below $24K, FIL could drop further towards 23.60% Fib level ($7.904), $7.708 or $7.510, which can be used as targets for shorting positions with stops above 50% Fib level ($8.345).
Near-term Bullish Outlook
On the other hand, bulls are aiming for overhead resistance at $9181 if it closes above 50% Fib level and BTC retests 25K levels for further upside momentum invalidating bearish bias set earlier . However there are hurdles at 61.8%, 78.6% Fibonacci levels that need to be overcome first .
Indicators Show Loss Of Momentum
The RSI and OBV have been declining significantly while Directional Movement Index (-DI) has been increasing showing loss of momentum leading up until now while development activity and demand have also gone down according to Santiment data with weighted sentiment improving slightly albeit staying positive overall .