FIL Bulls Face Rejection at $3.4, Can Traders Expect More Losses in the Coming Days

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and represents the opinion of the author only.

  • The $4 mark was an important support level that was lost last week
  • Filecoin has traded just above another psychological level at $3 but may soon face more bearish pressure

Core CPI data from the US Department of Labor last week saw a rise to $18,000 for Bitcoin, but those gains were quickly wiped out. Stock indices such as the S&P 500 posted losses last week and are expected to continue falling this week.

Filecoin suffered from intense selling pressure and saw significant losses on the price charts.

Read Filecoins [FIL] Price Prediction 2023-24

If Bitcoin can rise above the $17,000 mark again, there could be chances of a small rally in the market. However, patience was important. Trading on December 19 would likely illuminate the momentum for the assets over the coming week.

The $4 support has been broken decisively, euphoric bears

Filecoin Bulls Faced Rejection at $3.4, More Losses to Follow

Source: FIL/USDT on TradingView

A set of Fibonacci Retracement and Extension levels (yellow) have been drawn based on FIL’s move from $6.56 to $4 during the early November crash. From November 10 to December 16, Filecoin formed a range between $4.07 and $4.6.

On December 14, FIL retested the $4.38 region as resistance and fell nearly 30% to $3. Over the past two days, volatility and trading volume have been low.

The Fibonacci Extension levels presented $2.72 and $2.41 as downside targets further south. Meanwhile, the 23.6% extension level at $3.39 was almost retested as resistance. The Relative Strength Index (RSI) was strongly bearish and has remained in oversold territory for the past couple of days.

A bearish divergence near a significant lower time frame level may present traders with an opportunity to scalp. The Chaikin Money Flow (CMF) has been climbing weakly for the past few days, but appeared to dip below -0.05 once again to indicate strong selling pressure.

A move below $3 could see Filecoin fall to $1.44 in the coming weeks, the 100% Fibonacci Extension level based on the aforementioned decline from $6.56.

Open interest is witnessing a sharp decline alongside strong bearish momentum for the price

Filecoin Bulls Faced Rejection at $3.4, More Losses to Follow

Source: Coinanalysis

Over the weekend, open interest fell sharply to indicate the liquidation of long positions. Sentiment was bearish and the funding rate was also negative over the weekend. Liquidation data from Coinalyze showed $4.98 million in long positions liquidated when Filecoin fell from $4.15 to $3.02 on December 16.

Technical charts showed a bearish bias as momentum and market structure favored sellers. Futures market players were also not expecting a recovery from Filecoin anytime soon. If FIL can recover $3.4, it could result in a change to the shorter timelines. The longer-term trend remained strongly in favor of the sellers.

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