- A well-known technical analyst spotted a buy signal on the charts.
- Short positions were increasing their dominance, implying bearish sentiment.
Filecoin [FIL], like the broader altcoin market, bled profusely over the past week.
The token, which represents the decentralized storage network, shed 26% of its value in the last seven days, becoming one of the biggest losers in the market, according to CoinMarketCap. FIL was exchanging hands at $8.19 at press time.
The price slump resulted in increased pessimism about the coin, as per AMBCrypto’s examination of Santiment’s weighted sentiment indicator.
Source: Santiment
While not the ideal situation for FIL traders, it did provide an opportunity for accumulation.
Will you still buy Filecoin?
Prominent on-chain analyst Ali Martinez took to social platform X to highlight a buy signal flashed by FIL’s TD Sequential indicator. “If FIL can close above the 50-day EMA, we could see a one to four daily candlesticks upswing,” Martinez predicted.
AMBCrypto glanced through some of FIL’s other key technical indicators to make a sense of the above argument.
On a daily chart, the Relative Strength Index (RSI) continued to move below the neutral 50 level. Typically, the 40-50 level acts as a good support level during an uptrend, raising hopes of an upward breakout in the days ahead. A dip below 40 however, could nullify this narrative and strengthen the bears.
The On Balance Volume (OBV) largely mimicked the price trend. In the last few days, the trend of lower peaks and lower troughs was snapped, giving hopes of a breakout to the north.
Source: Trading View
How much are 1,10,100 FILs worth today?
Traders reduce long exposure
Meanwhile, FIL’s derivatives market presented an interesting picture. According to AMBCrypto’s analysis of Coinglass’ data, the funding rate was positive, implying a broader bullish statement.
However, the declining trend in the last few weeks suggested increasing dominance of short positions, and therefore expectation of bearish conditions in the days ahead.
Source: Coinglass