Filecoin edged closer to a familiar hurdle that has offered short-sellers market re-entry in the past. Will it present a similar opportunity?
- The $4.25 immediate support was respected.
- Open Interest rates and funding rates wavered.
Like most altcoins, Filecoin [FIL] has fronted an impressive recovery since mid-June. However, a familiar roadblock at $5 has prevented further upside. So far, FIL has faced two price rejections at the hurdle, making it an entry zone for short-sellers.
Will the roadblock give sellers an entry point?
At the time of writing, FIL’s price action had rebounded from the immediate support of $4.25 and aimed at the $5 roadblock. The immediate support of $4.25 has been a crucial lifeline for bulls in early January, May, and July.
Also, the roadblock, the D1 bearish order block of $4.68 – $5.03 (red), has frustrated bulls for a while. With muted BTC price movements below $30k and an incoming FOMC meeting, FIL could face another price rejection at the roadblock.
If that’s the case, the $5 roadblock could present another shorting opportunity with a good risk ratio, targeting the immediate support of $4.25.
Conversely, clearing the $5 hurdle will flip the D1 market structure bullish and invalidate the above bearish thesis. But FIL bulls must cross above $5.2 to gain more edge.
Meanwhile, the Relative Strength Index has fluctuated above the neutral level, denoting wavering buying pressure in the past few days. But the On Balance Volume registered an uptick, indicating improved demand in the past few hours.
Open Interest and funding rates wavered
FIL’s Open Interest (OI) rates wavered in mid-July but increased from 19 July. It shows demand in the futures market improved in the same period. However, the OI wavered below $90 million since 21 July, indicating a stagnated demand in the same period.
The funding rates concurred with OI’s trend. There were considerable fluctuations in funding rates between 21- 22 July.
These metrics could favor sellers with price action approaching key resistance at $5. But traders should track BTC price action for best-optimized set-ups.