Key takeaways
What led to the recent surge in Filecoin prices?
This rise was driven by the hype surrounding DePIN Day and strategic partnerships promoting decentralized infrastructure.
Can Filecoin maintain its bullish momentum?
If buying pressure continues, FIL may target $2.6, but heavy profit taking could pull it back to $1.7.
After reaching a local low of $1.2. filecoin [FIL] Finally, the pair broke out of the month-long consolidation range, reaching a high of $2.29.
At the time of writing, Filecoin is trading at $2,215, up 68.92% on the daily charts, reflecting intense bullish pressure.
During this period, altcoin trading volume increased by 901% to $1.56 billion, indicating a steady inflow of capital.
But what is behind this sudden rise?
Filecoin DePIN Day sparks speculation in the market
Notably, Filecoin rose amid a sector-wide hack via the Decentralized Physical Infrastructure (DePIN) network.
In fact, DePIN’s market cap rose 6.45% to $30.1 billion, while trading volume jumped 76.8% to $6.7 billion, according to CoinMarketCap.
This sector-wide breakout was highly anticipated Deben’s day In Buenos Aires on November 18.
During this event, Filecoin partners, including Protocol Labs, will discuss decentralized data infrastructure and enterprise integration.
Moreover, the Filecoin Foundation Announced a partnership with the GSR Foundation to fund projects that support decentralized storage.
Under this cooperation, the two will promote projects involving human good, including human rights, science and art.
Speculators jump into the market
Interestingly, investors have positioned themselves in the market amid growing hype around DePIN Day.
GSR’s announcement once again supported investors’ bullish momentum. As a result, demand for futures positions has increased dramatically.
In fact, according to CoinGlass data, derivatives volume rose 819% to $3.57 billion while open interest jumped 115.8% to $275.23 million, at the time of writing.
Source: Coinglass
Typically, when these two rise in tandem, it reflects increased market participation and capital flow.
Meanwhile, the buy/sell ratio rose to 1.02, indicating that most investors jumped into the market to take long positions.
Consequently, most derivatives participants were very bullish and expected prices to rise.
Profit taking is at an all-time high
Unsurprisingly, after Filecoin hit a monthly high, investors and holders who had been underwater rushed into the market to withdraw their funds.
According to Coinalyze, sellers have dominated the market since Filecoin attempted to rebound days ago.
Source: Queenalyze
In fact, over the past 24 hours, Filecoin saw a selling volume of 88.25 million, reflecting the market’s ongoing profit-taking behavior.
Moreover, stock market activity echoed this profit-taking trend. According to CoinGlass, Filecoin’s Spot Netflow value rose to an all-time high of $6.45 million on November 6th.
Source: Coinglass
Since then, it has declined significantly, falling to $2.36 million at press time, also indicating higher inflows.
Typically, increased profit taking accelerates downward pressure on the asset, causing prices to fall.
Can the bulls hold on and aim higher?
According to AMBCrypto, Filecoin rose after crossing the $1.70 resistance level, with buyers intervening heavily, confirming a bullish reversal.
As a result, the Sequential Pattern Strength (SPS) of the altcoin has risen to 29.3, as of the time of writing, indicating strong buyer dominance. Likewise, the Relative Strength Index (RSI) rose to 66, validating this bullish shift.
Source: Trading View
Usually, when these indicators reach these levels, they indicate a potential trend continuation, keeping the prevailing factors constant.
Therefore, if these conditions persist, Filecoin will reclaim $2.4 with $2.6 as the next important resistance level. However, if profit taking overpowers the scalpers, sinking the momentum, FIL will retreat towards $1.7.
