Like other altcoins, Filecoin (FIL) is facing intense volatility following the broader market crash. The latest data from multiple price tracking platforms shows that FIL’s price has dropped a staggering 16.38% in the last 24 hours.
The drop leaves investors in the grip of uncertainty despite promising developments scheduled for Tuesday, August 6. Here’s what the cryptocurrency could be in store.
Traders Ignore Filecoin Update, Decide to Follow the Money
At press time, FIL is trading at $3.03, the lowest the token has reached in over ten months. Despite the notable decline, Santiment shows that the funding rate has turned negative.
The funding rate provides insight into traders’ expectations. When the ratio is positive, it means the perpetual price is trading at a premium to the spot price, which also indicates that traders are betting on the price to rise.
However, negative funding means that traders are expecting the price to decline further, while noting an increase in short contracts. Thus, the Filecoin funding rate shows that market participants are not planning to counter trade the current price action, despite doing so since the beginning of the month.
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Meanwhile, the actions of these traders have not affected the broader market perception of FIL. According to Santiment, Weighted Sentiment has moved into positive territory.
The weighted ratio measures the social volume of an asset, expressed in positive or negative terms.
Whenever the readings are in the positive range, the average cryptocurrency commentary is biased towards optimism. Conversely, negative readings suggest the opposite.
This optimism may be related to the Filecoin Waffle upgrade scheduled for August 6. The upgrade, codenamed NV23, aims to improve compatibility with the Ethereum ecosystem and reduce transaction confirmation times.
FIL Price Forecast: More Bears, No Bulls
In July, FIL consistently recorded daily green candles that pushed the price from $3.47 to $4.80. With all of those gains erased, traders will be wondering if the altcoin could be set for a rebound.
As the chart below shows, the bulls are clearly out of the game, as indicated by Bull Bear Power (BBP), as it is affectionately called. BBP establishes the relationship between the power of the bulls and the bears.
Bulls (buyers) are stronger when BB is rising in the positive area. However, at press time, BBP is in the negative area, which indicates that bears are dominant. If this continues, FIL price risk will fall below $3 and may decrease to $2.87.
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However, if buying pressure starts to gain momentum, the price of FIL could increase. If this happens, the price could rise to $3.56.
