- FIL broke out of a descending wedge, signaling the potential for a bullish reversal
- Market sentiment remains cautious while technical indicators reveal mixed strength signals.
Filecoin (FIL)at the time of writing, seemed have broken out of their downward wedge trend on the 8-hour chart, signaling a potential shift in momentum.
Despite this breakout, however, FIL had a press time price of $5.40, with the crypto down 7.37%. This raises concerns about whether this upward movement can be sustained. Can the market regain confidence and push FIL higher?
Will FIL recover after breaking the falling wedge?
FIL’s price action highlighted a significant technical breakout from its descending wedge pattern, which typically indicates a bullish reversal. However, after reaching $5.87, the price returned to $5.40 – a sign of hesitation on the part of traders.
Immediate resistance lies at $6.059 – a key level that must be breached for further gains. On the downside, $4.774 appears to be a strong support level, which could prevent a deeper correction.
Source: TradingView
How are Binance funding rates shaping sentiment?
Binance funding rates for FIL were slightly positive at 0.01%, reflecting cautious optimism in the market. While this indicates that traders have been slightly more bullish than bearish, the lack of significant increases in funding rates also suggests a lack of conviction.
Therefore, for FIL to recover significantly, funding rates must increase to reflect growing demand. Otherwise, the market could remain stagnant in the short term.
Source: Santiment
FIL social measures lack dynamism
Despite this breakthrough, FIL’s social volume and dominance remains surprisingly low, with only 8 mentions recorded. This subdued social activity highlighted the limited engagement of retail traders, which often fuels market rallies.
Additionally, low social dominance suggests that FIL is not yet on the radar of the broader crypto community. For sustained upward momentum, social metrics must improve to draw more attention to FIL’s potential.
Source: Santiment
Technical indicators highlight market hesitations
FIL’s technical indicators revealed a mixed picture. The DMI showed -D at 24.45 exceeding +D at 22.34 – suggesting slight bearish dominance. Additionally, the ADX at 13.79 highlighted a weak trend, while the RSI at 49.05 indicated neutral momentum.
Therefore, Filecoin needs stronger buying pressure to establish a clear bullish trajectory and regain investor confidence.
Source: TradingView
Market Sentiment Reflects Cautious Positioning
Finally, Filecoin’s open interest fell 5.79% to $324.7 million, indicating a decline in leveraged positions. Additionally, total liquidations amounted to $1.75 million, favoring long positions, highlighting the lack of confidence among traders.
While the decline in open interest suggests a reduction in market activity, a reversal could trigger renewed interest in Filecoin’s potential upward move.
Source: Coinglass
Read Filecoin (FIL) Price Prediction 2024-2025
Can the FIL continue its recovery?
Filecoin’s breakout is encouraging, but its ability to recover depends on breaking critical resistance at $6.059 and seeing stronger market participation.
Without higher funding rates, improved social metrics, and open interest, FIL may struggle to maintain its bullish momentum. Therefore, even if the breakout is promising, the continuation of the rise will depend on renewed buying pressure and market enthusiasm.
