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Filecoin Price Heading Towards A Breakout While Bullish Sentiment Remains Intact

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  • Currently trading at a low of 34.65% from its ATH, FIL is soon to approach break out
  • Currently trading at a low of 34.65% from its ATH, FIL is soon to approach break out

On analyzing FIl/USD on the 12-hour chart, the asset is confined inside a bullish flag chart pattern and can proceed towards a breakout any time this week. However, the volume has significantly declined, and it is expected that a breakout will lead to recovery.

At present, the asset is trading sideways and has tested the support level of $125, suggesting a bounce-off. This proves that the bears were unsuccessful in gaining the upper hand. A breakout towards the upside will most definitely end the consolidation phase and will project an uptrend.

An ideal situation would be a breakout testing the resistance level of $193. Speculators can enter long when the trend is followed by a backtest because that would trigger a bullish momentum.

source-tradingview

Bullish divergence on the 4-hour chart

source-tradingview

The above structure looks extremely promising as the chart has also dictated bullish divergence. It was confirmed once we saw the price action make higher lows, whereas oscillators such as MACD and RSI had formed a lower high. 

The current price of FIL is above all key EMA levels, which are acting as a major source of support for this asset. It appears that the 20 EMA(yellow) is pumping and is on the verge of traveling above the 50 and 100 EMA. 

This is the indication of a bullish crossover which strengthens the momentum all the more. If the price retests downwards, the 200 EMA (blue) will support right in to test as support at $142. The RSI is levitating in the range of 59.30, indicating a no trend scenario. A breakout towards the upside will push the RSI in the overbought territory. 

MACD, too, suggests a bullish scenario as the MACD line is above the signal line on account of a bullish crossover.

CONCLUSION: A bullish divergence may not be the ideal strategy but when accompanied by a breakout from a long trend and EMA manifest a good buying opportunity. 

If the breakout strategy works as anticipates, investors can start eyeing the psychological resistance of $306 (FIB 1.61). Since we are aware of the impact of Bitcoin dominance on altcoins, if the pair BTC / USD holds up, then we can confirm a bounce off from the support level of $125. Speculators should only go long once the breakout is confirmed by volume and a backtest.

SUPPORT : $125 and $142

RESISTANCE : $193 and $237

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Author-Malishka

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