Filecoin (FIL) price is going parabolic but DeFi headwinds remain

Filecoin (FIL) price has gone parabolic in the past few weeks as a sense of Fear of Missing Out (FOMO) spread in the crypto market. The token surged to a high of $5.68, the highest point since April this year. At its peak on Monday, the token was up by over 93% from the lowest point in September.

Filecoin DeFi TVL falling

Filecoin price has done quite well in the past few weeks. This rally is mostly because of the rising greed in the crypto industry after Bitcoin and Ethereum rose to $37,000 and $2,000, respectively.

As a result, investors are starting to get quite greedy. The dear and greed index, a popular sentiment gauge, has risen to the greed zone of 75. In most cases, cryptocurrencies tend to do well when investors are greedy.

Filecoin price has also jumped after Protocol Labs unveiled the InterPlanetary Consensus (IPC) technology. The developers hope that the new consensus will unlock a new era of Web3 scaling and flexibility for developers. It has sub-second transactions, have a robust compute workloads, and scalable subnets.

Introducing the latest from @protocollabs: InterPlanetary Consensus (IPC), a revolutionary blockchain technology that powers planetary-scale web3 apps.

This transformative tech is;
✅Infinitely Scalable
✅Deeply Customizable
✅Profoundly Dynamichttps://t.co/yrTdfq8Qpf pic.twitter.com/NMuc82iOCf

— Filecoin (@Filecoin) November 10, 2023

The new IPC launch is in line with what the developers have been working on this year. For example, they launched Filecoin Virtual Machine (FVM), which made it possible for developers to launch dApps in the ecosystem.

Filecoin’s FVM had strong demand earlier on as the DeFi TVL jumped to an all-time high of 950k FIL. Recently, the TVL has dropped and currently stands at 351k FIL, which is equivalent to just $1.67 million.

Filecoin also launched Filecoin Web Services (FWS), which it hopes will be the decentralized version of Amazon’s AWS and Microsoft’s Azure.

Meanwhile, Filecoin’s price jump has led to a jump of shorts liquidations, which rose to over $2.59 million in the past 24 hours. These numbers show the volume of short sales that were forced to close their positions.

At the same time, Filecoin’s futures open interest has jumped in the past few days. It spiked to over $178 million in the past 24 hours. Most of this open interest was in Binance, OKX, Bybit, and BingX.

Filecoin price forecast

FIL chart by TradingView

The daily chart shows that the FIL token has been in a strong uptrend in the past few months. It has even risen in the past six straight days and is now hovering at the highest level since April 2023. FIL has jumped by over 106% from the lowest point this year.

As a result, Filecoin has jumped above the important resistance point at $5.52, the highest level in June. It has also risen above the 61.8% Fibonacci Retracement level. This tool connects the lowest point in November last year and the YTD high of $9.5. 

Filecoin sits above the 50-day and 100-day Exponential Moving Averages, which is another positive sign. Therefore, with the token being overbought, I suspect that it will have a brief pullback as sellers target the support at $5.00. In the long term, however, the bullish trend will likely continue.

The post Filecoin (FIL) price is going parabolic but DeFi headwinds remain appeared first on Invezz