PATNA (CoinChapter.com) — Filecoin price may be showing signs of strength after nearly two years of build-up, and analysts are speculating that FIL may begin an upward move.
The decentralized storage network’s native token has been in an accumulation phase since May 2022 and has fallen below $9.5. X-based cryptocurrency analyst, “Crypto Bullet,” stated that the accumulation phase of Filecoin tokens could be nearing its end.
The relative balance of supply and demand, with prices stabilizing or moving within narrow ranges, helps identify the stages of accumulation of an asset. Often, the accumulation phase can help drive up the price of an asset by absorbing a significant portion of the token supply.
CryptoBullet has set resistance levels at $17 and $25 in case the FIL price surges. However, a cumulative breakout is not the only bullish signal favoring the Filecoin price.
FIL price draws a bullish triangle pattern.
Meanwhile, Filecoin price formed a bullish technical pattern called ””.rising triangle.’
The horizontal trend line connecting the swing highs and the rising trend line connecting the swing lows form an ascending triangle pattern. Volume helps determine whether a breakout is strong. FIL price action within the triangle appears to be testing the resistance level multiple times, indicating intensified buying pressure.
In ideal conditions, buyers will enter the market when the trend line closes the gap. As a result, the price of the token rises above the horizontal resistance due to high volume trading.
According to the rules of technical analysis, the target price for a breakout is equal to the height at the thickest point of the triangle. If the triangle pattern develops, FIL price would have a theoretical target price near $37, a surge of nearly 407% from current levels.
An overbought RSI will cause the price to confirm growth.
The recent rally has pushed FIL price’s Relative Strength Index (a momentum indicator that measures the magnitude of recent price changes) above 70, hitting 81.18 on the daily chart, creating overbought conditions for the token.
Because overbought RSI levels typically precede a bearish reversal or consolidation phase in an asset, traders consider them a sell signal.
The bears are aggressively defending the supply wall near $7.8, which is evident in the long upper wick of the recent daily candle. However, a break above the immediate resistance could help the Filecoin price bounce to $9, near the triangle resistance, before a correction.
On the other hand, if the rally fails, FIL price is likely to fall to support near $7. Additionally, a failure of the immediate resistance level could lead Filecoin’s price to test support near $6.