During the past few days, the price of Filecoin (FIL) has plummeted as investors questioned the utility of the network. As a result, FIL fell to a low of $2,387, which was its lowest level in over a year. Since it reached its all-time high in October of 2009, it has collapsed by more than 98%, giving it a market cap of over $1 billion.
Is It a Market Sign?
Filecoin is a blockchain-based platform designed to tackle the challenge of storing and exchanging data as well as files, and it was launched in January 2017. Amazon, Google, and Microsoft are all major companies that dominate the storage industry, and the company’s goal is to disrupt them.
Filecoin allows anyone who has free storage to sell their free bandwidth through the Filecoin network, rather than relying on giant storage servers located around the world. It is possible for anyone to provide storage to the network by using their smartphone, laptop, or even their home data server and be rewarded.
During the height of Filecoin’s popularity, it was one of the most popular cryptocurrencies in the world. Due to the belief that blockchain technology would disrupt the storage industry, it became one of the top 15 cryptocurrencies.
There has been a strong bearish trend in FIL’s price in the last few months as can be seen on the daily chart. In recent weeks, this decline has been accelerated by bearish bets on the coin, which accelerated during the weekend. While the Relative Strength Index (RSI) has moved into an oversold zone for the first time in its history, the price has moved below all moving averages.
It is therefore likely that Filecoin’s price will continue to fall as demand for the fallen angel declines as the number of users continues to decline. In such a scenario, the next key support level to watch will be $2 if the above scenario occurs. In order for the bearish view to be invalidated, it is necessary for a move above the $4 resistance level.
Some traders might question the utility of storage protocols, as these protocols have a massive storage capacity, which is constantly growing, but they do not appear to have any obvious use cases for using them.
The current price of FIL is $2.98, and the candlestick on Dec 20 is showing a green color. As a result of this downtrend, investors are becoming worried about the future of this coin, so they are looking for alternative coins.
There is a possibility that we may witness more sell pressure that pushes the coin even lower and may cause a domino effect that leads to a fall in price. Despite the fact that the market has been falling in recent days, some coins like Filecoin are likely to suffer further losses over the next few weeks.