Disclaimer: The information presented does not constitute financial, investment, trading or any other type of advice and solely represents the opinion of the author
- The FIL has hiked massively in the past few weeks.
- Momentum slowed amid macroeconomic uncertainty.
Filecoin [FIL] has experienced double-digit gains over the past few weeks. In the last seven and 30 days, the token has increased by 50%. The main driving factor behind the recent uptrend has been a planned expansion by a Virtual Filecoin Machine (FEVM).
However, according to CoinMarketCap, FIL is down over 10% in the past 24 hours. The correction followed a sharp rejection from Bitcoin [BTC] at the $25,000 price level amid market uncertainty and a possible Fed hawkish stance if inflation persists.
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Personal consumer spending (PCE), to be released on Friday, is a key tool the Fed uses to track inflation and could guide its monetary policy stance at the March FOMC meeting.
Simply put, Friday’s event will impact FIL’s March price action and overall performance for Q1 2023.
The short-term recovery of the FIL is at stake
Source: FIL/USDT on TradingView
Notably, FIL tumbled 17% after a price rejection at $9.181. But the $7.708 support was stable and allowed the bulls to stage a rally but was facing an obstacle at the time of writing.
FIL could fall to the 23.60% Fib level of $7.904, $7.708 or $7.510 especially if BTC falls below $24.20K. Short-term bears can use these levels as short selling targets. A stop loss can be placed above the 50% Fib level of $8.345.
How much is 1,10,100 FILS worth today?
On the downside, short-term bulls could target the $9.181 overhead resistance level if FIL closes above the 50% Fib level. But they have to deal with the hurdles at 61.8% and 78.6% Fib levels. The upleg could be accelerated if BTC retests $25,000. But the rebound will invalidate the above bearish bias.
Meanwhile, the RSI and OBV declined significantly over the past few days, showing that FIL’s momentum has slowed. In addition, the DMI (Directional Movement Index) showed that -DI (red line) increased during the same period, confirming the weaker structure.
FIL development activity and demand declined; weighted mood improved
Source: Santiment
According to Santiment, as of February 16, FIL’s development activity declined. Similarly, weighted sentiment fell as demand fluctuated, as shown by the funding rate.
But the funding rate remained positive and sentiment improved, indicating slight bullish sentiment at press time. Any further increase in demand and positive sentiment could propel FIL towards the 50% Fib level. But investors should follow BTC price action before making any move.
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