“This too will pass. It may pass like a kidney stone. But it will pass.” This is exactly what the long-term holders of Filecoin must have said to themselves at this point. Unsurprisingly, FIL has capitulated en masse from its all-time high. At the time of this analysis, the token was trading at $18.13, down more than 90% from its April 2021 high.
It’s worth noting that the project shows a lot of promise, which hasn’t really translated into its price action. After September 6, 2021, investors wondered if it’s a long-term downtrend or just a good time to “buy the dip.”
Here is the answer
While Bitcoin has tried its best to exceed its psychological level, FIL seems dormant in this regard. Bears have been the driving force behind the FIL market for quite some time now. Well, in the current market structure, if the bulls are defending and applying pressure, FIL could rise to test its local top at $21.68. And if the selling pressure hits, the token could even fall below the $16.98 floor.
At that point, the Filecoin market needs buyers to brave the long-term bearish momentum. However, it is important to note that due to the token’s unimpressive performance, many investors have preferred to cut losses. Investors who bought the token in the September 2021 bear market must have felt guilty by now.
It is also interesting to note that while the volume has increased at some points, the price has not reacted to it at the same level. RSI was at the 49 mark to the south at the time of writing. Specifically, technical data makes it clear that the current market does not offer a ‘buy the dip opportunity’.
But what about the measurement data?
Well, the price chart may not be able to reflect the latent opportunity to make money. But on-chain stats reveal the true picture. And in the case of Filecoin, the scenario looks dull and worrying. The on-chain volume has unexpectedly decreased. Even though there were a few increases in 2022, none of them could match the highs of 2021. This clearly shows that traders have exited their positions. In fact, the long-term holders have also chosen to sell their tokens.
In order for investor sentiment to remain strong, a currency’s social dominance plays an important role. Well, FIL’s social dominance has been below zero after November 10, 2021. It is just meant to match that the token was not discussed even during the bull market. Simply put, Filecoin has not received any attention from investors looking to make money.
Amid all the negative signs, it is important to note that development activity has increased despite the massive price drop. In fact, the Filecoin team seems to be leveling up its game after December 2021. At the time of this analysis, development activity was strong at 48.45 counts. However, it remains to be seen whether the development activity alone can bring FIL into the price charts.
This post Could an increase in development activity end FIL’s downward trend amid market capitulation
was published first on https://ambcrypto.com/will-increase-in-development-activity-end-fils-downtrend-amid-market-capitulation/