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The local token of Filecoin, FIL, has seen a decline in buying pressure, which could trigger a process resulting in the loss of recent gains. FIL, which has been moving within a rising channel, is showing signs of weakness as it moves closer to the lower channel.
Current Status of Filecoin
FIL has been moving within a rising channel since July 4. This channel generally indicates a price increase. The channel for FIL has encountered resistance at $5.05 and has a support level at $4.37.
On July 23, FIL attempted to break resistance but failed, resulting in a price pullback. As of the time of writing, FIL is trading at $4.44. Generally, movements towards support within this channel are known to bring a decline in buying pressure.
If bulls fail to maintain this support level, it could lead to larger declines and trigger a noticeable price drop. Until there is an improvement in sentiment, the price decline may continue.
On the other hand, the Relative Strength Index (RSI) indicator for FIL suggests a possible movement below support. The RSI value for FIL remains near 50, but it reached this level after a downward movement.
The RSI generally indicates the existing overbought or oversold pressure in the market, and with the recent decline, the buying pressure has been decreasing.
What Will Be the Price of FIL?
On-chain data also shows a negative trend for FIL, which has not gone unnoticed by investors. According to data provided by Santiment, the weighted sentiment at the time of writing was -0.04.
The weighted sentiment metric measures the market’s sentiment towards the asset. A negative metric indicates that investors generally have negative emotions such as uncertainty and doubt, which is usually associated with a market decline.
If sentiment and indicators remain negative, FIL could fall below the support level, potentially reaching the lowest level seen in the last nine months at $3.25. However, if the current trend reverses and buying pressure increases, it could rise to $5.28.
