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Since hitting an all-time high of $237 on April 21, 2021, Filecoin (FIL) has been under the distressing impact of a bear market. Currently, a bearish flag formation is discernible on the altcoin’s 4-hour price chart. In theory, this formation only signals a drastic decline if the support trendline breaks, providing a temporary pause from the prevailing downtrend. Let’s delve deeper into how this formation could potentially impact FIL’s price.
Filecoin Price Analysis
The formation of a bearish flag on the price chart suggests a minimum 12% drop following a successful breakout. In the event of such a decline, the sequential targets would be $4.2, $4, and $3.55.
Market leader Bitcoin’s (BTC) continued selling pressure has so far led to the accumulation of Filecoin’s price within a narrow range, trapped between the flag pattern’s converging trendlines. The altcoin’s price is currently trading at $4.391, experiencing an intraday decline of 2.88%.
The FIL price may be expected to fall under the influence of the bearish formation and break the support trendline. A break downwards from this trendline will amplify selling pressure, presenting a prime entry opportunity for those wishing to short the altcoin. The first target, in this case, would be the distance between the flag triangle’s first high and low swing, from the point of breakout. Consequently, it can be anticipated that Filecoin’s price might drop at least 12% to reach the $3.88 level.
Alternatively, a break from the triangle’s resistance trendline could potentially turn the bearish scenario into a bullish one.
Will Filecoin Price Drop Below $4 Support?
A break below the flag formation’s support line will perpetuate the prevailing downtrend in the price. Sequential targets for the declining Filecoin price would be $4.22, the psychological support level of $4, and $3.85.
