- Filecoin price has moved out of the Bollinger Bands indicator’s top end, suggesting an overextended bull rally.
- The recently spawned sell signal from the MRI suggests a one-to-four candlestick correction is likely.
- A 30% retracement to the 61.8% Fibonacci retracement level at $108.64 seems plausible if the support level at $153 is broken.
The Filecoin price shows a retracement to an immediate demand barrier is likely after the recent but explosive run-up.
Filecoin price hints at pullback
The Filecoin price has seen a 551% surge from February 21 to March 29, which has propelled it from a mere $30 to $238. FIL seems to be heading higher after retracing nearly 32% on April 1.
The Bollinger Bands indicator reveals that the recent run-up has pierced through its upper band suggesting an overextended volatile bull rally. More often than not, this signal indicates that a retracement is around the corner.
If such a pullback were to occur, FIL would first drop 18% to $153.28, the 78.6% Fibonacci retracement level. However, if this area of demand crumbles, the Filecoin price could visit the 61.8% Fibonacci retracement level at $108.41, after a 30% drop.
Adding credence to the bearish outlook is the red one candlestick formed by the Momentum Reversal Indicator (MRI) on the 3-day chart. This setup forecasts a one-to-four candlestick correction.
FIL/USDT 3-day chart
It is worth noting that the bullish outlook is dependent on the assumption that MRI’s reversal signal is yet to be completed. However, if it is not, a possibility of a new uptrend evolves.
Therefore, a spike in buying pressure that pushes FIL by 25% will trigger a local top’s retest at $238.51. If the buyers manage to produce a decisive close above this level, it will reignite FIL’s bullishness and propel the coin 15% toward $272, which coincides with the breakout line produced by MRI.
A strong close above this level could allow the sidelined investors to step in, pushing FIL 53% to the next target at $417 or the 127.2% Fibonacci retracement level.
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