FIL, the native token of the leading decentralized storage system Filecoin, is poised to lose its recent gains as buying pressure begins to wane.
After a sustained rally within an ascending channel, FIL is showing signs of weakness. It now trades close to the lower line of the channel, which forms support.
Filecoin Witnesses a Decline in Buying Pressure
FIL has trended within an ascending channel since July 4. This channel is a bullish signal. It is formed when an asset’s price moves between two upward-sloping parallel lines.
The upper line of the channel acts as resistance, while the lower line serves as support. FIL has faced resistance at $5.05 and has found support at $4.37.
On July 23, FIL failed to cross the upper line of this channel, and its price has since trended toward support. At press time, FIL trades close to the support line at $4.44.
Generally, when an asset’s price falls toward the lower line of an ascending channel, it signals a decline in buying pressure. It means that market participants are beginning to sell their holdings for gains.
When bulls fail to defend the support level and an asset’s price falls below it, a downtrend is confirmed. The price may continue to plummet further until sentiment improves.
Furthermore, FIL’s declining Relative Strength Index (RSI) hints at the possibility of a fall below support. As of this writing, the indicator is in a downtrend and appears ready to breach the 50-neutral line.
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This indicator measures an asset’s overbought and oversold market conditions. FIL’s RSI setup signals a shift in market sentiment from optimism to caution. It suggests weakening buying pressure and confirms the bearish bias toward the altcoin.
FIL Price Prediction: Negative Sentiments May Put the Altcoin in Jeopardy
The negative bias trailing FIL on-chain is notable. According to Santiment, its weighted sentiment is -0.04 at press time.
An asset’s weighted sentiment metric measures the overall mood of the market regarding it. When it is below zero, it suggests that most social media discussions about an asset are fueled by negative emotions like fear, uncertainty, and doubt. This is seen as a precursor to a price decline or a confirmation of a downtrend.
If market sentiment remains poor, FIL’s value may fall below support and plunge to a nine-month low of $3.25.
Read More: Filecoin (FIL) price prediction 2024/2025/2030
However, if the current trend reverses and demand for FIL spikes, the token’s price might rally above resistance to trade at $5.28.
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