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Technical Analysis

Filecoin (FIL) Price Hits Local Bottom, Will Relief Rally Follow?

2 mins
Updated by Geraint Price

In Brief

  • Filecoin (FIL) is following a long-term descending resistance line.
  • It reclaimed the $5.50 resistance area.
  • Filecoin (FIL) could be in an A-B-C correction.
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The Filecoin (FIL) price could be nearing the end of its short-term correction, after which a considerable bounce will follow.

The Filecoin price has fallen under a long-term descending resistance line since its $237.73 all-time high in March 2021. The decrease led to a minimum price of $2.37 in December 2022. The price has increased since. 

More importantly, the FIL token managed to reclaim the $5.55 support area. This was a crucial development since it rendered the previous breakdown as illegitimate. Moreover, the $5.55 area is expected to provide support again.

However, despite this reclaim, the FIL coin price failed to break out from the resistance line (red icon). The trend cannot be considered bullish until it does. 

If FIL breaks out, it could increase to the next resistance at an average price of $25. However, if a breakdown from the $5.55 area occurs, a drop toward $2 could follow. 

The weekly RSI has generated bullish divergence (green line), and is above 50. Therefore, it supports the possibility of a breakout.

Filecoin (FIL) Long-Term Movement
FIL/USD Weekly Chart. Source: TradingView

Filecoin (FIL) Price Prediction for March: Relief Rally Right Around the Corner

While the technical analysis from the weekly time frame gives an undetermined trend, the daily chart suggests that the FIL price will soon begin a relief rally. This is because the price has completed a five-wave upward movement on Feb. 17 and has been retracing since, without experiencing a bounce.

So, it is likely that it is nearing the bottom of the corrective wave A. Afterward, a relief rally as part of wave B will occur, followed by another drop toward the 0.618 Fib retracement support level at $5.17. Even though only a decrease below the wave one low at $2.41 would completely invalidate this count, a fall below the sub-wave four low (red line) at $4.61 would put it at serious risk.

Filecoin (FIL) Price Prediction for March
FIL/USDT Daily Chart. Source: TradingView

To conclude, the most likely Filecoin price prediction for March is a significant relief rally toward $9 followed by another drop to $5.17. A close below $4.61 would put this bullish Filecoin price forecast at risk and could be the catalyst for a sharp fall.

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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.