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Filecoin (FIL) price is facing an intense downtrend as the demand for the crypto asset keeps decreasing. The investor interest has significantly decreased in the project in the past two years. Many analysts believe the project has already peaked and may never hit a new all-time high. However, we’re going to analyze FIL crypto from a different perspective.
Altcoins are showing a good recovery this week as the BTC price surged above $27,000. With only a 1.29% rise this week, Filecoin lags in the ongoing market recovery. Technical analysis shows that the coin is still maintaining its bearish market structure.
FIL/BTC Pair Remains In A Tailspin
The high timeframe analysis of the FIL/BTC pair reveals that FIL investors are constantly selling their coins for BTC. This pair also shows that investors are preferring Bitcoin over Filecoin under the current market conditions. As long as this pair remains in a downward spiral, I don’t expect FIL to USD price to see any upside.
The following chart shows that 0.000145 is a very significant level on the daily and weekly timeframes. Currently, the price is consolidating below this line. A reclaim of this level may trigger a relief rally in FIL price, which is down 98.5% from its all-time high.
Filecoin Faces Headwinds From Rising BTC Dominance
The Bitcoin dominance (BTC.D) chart shows the flow of capital in the crypto markets. An increase in BTC.D suggests that the smart money is moving from the altcoins to Bitcoin. Since its August lows, BTC.D is up 2.81%. This shows investors are more interested in buying Bitcoin than altcoins due to the risk factor.
The dominance reflects the market share of Bitcoin in the total market capitalization of the digital assets market. Currently, the pioneering cryptocurrency accounts for 50.27% of the total crypto market cap. The increasing Bitcoin dominance is generating headwinds for Filecoin price which is trading at its historic lows.
Filecoin Price Prediction Remains Bearish
Just like the FIL/BTC pair, the FIL/USD pair has also been in a tailspin for the past two years. The following chart reveals the significance of the $5 price level. This level was a previous support that has now flipped into a resistance. My Filecoin price prediction will remain bearish as long as it trades below this level.
The price is also trading around 25% below the 200-day moving average, which is another sign of weakness. If Bitcoin tumbles again, I expect FIL crypto to retest the December 2022 lows around $2.5 in the coming months. Despite all the negative price action, Filecoin still remains the 32nd biggest cryptocurrency with a market capitalization of $1.5 billion.
