Filecoin’s (FIL) breakthrough on September 30 ended a corrective period that had been ongoing since September 5.
The the potential upward movement is not yet confirmed, there are strong signs that FIL is in the early stages of a significant increase.
WIRE bursts
The FIL has been down since September 5, when it hit a high of $ 120.17. The downward movement took the shape of a descending wedge, which is considered a bullish reversal pattern. Therefore, in the majority of cases, the price should break out of the trend.
On Sept 30, FIL finally broke out, putting an end to the ongoing correction. It peaked at $ 81.22 on October 8 before falling. The token is currently attempting to find support.
Technical indicators provide a neutral picture. The MACD, which is created by a combination of short- and long-term moving averages is right at the 0 line. This is a sign of an indeterminate trend, as both short and long term trends move at the same. rhythm.
The RSI, which is a momentum indicator, has just fallen below 50. While such crosses suggest the trend is bearish, it remains to be seen if it will recapture the line, as it is only gradually below.
Therefore, a look at lower time-frames is required in order to determine the direction of the future trend.
Future movement
The two hour short term chart shows that FIL is following a descending resistance line. It has been doing so since Oct 8. As long as it is doing so, the short-term trend is considered bearish.
However, FIL rebounded just to the 0.618 Fib retracement support level (green circle), before attempting a breakout. A breakout from the line would indicate that the correction is complete.
If FIL doesn’t, it will likely revisit the $ 56.70 area. This is both a horizontal support area and the 0.786 Fib retracement support level.
Number of waves
Cryptocurrency trader @Thetradinghubb described a FIL chart, indicating that the token has completed an ABC corrective structure and could now move upward.
It is possible that the entire upward movement from Jul 21 to Sept 5 (highlighted) was part of wave one of a bullish impulse (orange). This means that this is the start of a new long term bullish movement. The main reason for this is the fact that the move is created by five distinct waves (black).
Additionally, the ensuing decline ended at the 0.786 Fib retracement support level (green circle). This is common for corrective movements.
Therefore, if the count is correct, FIL will continue to rise and exceed the September high.
A decrease below the Sept 26 low of $50 (red line) would invalidate this potential count.
