Filecoin Logarithmic Channel Caps Gain at $11
Filecoin (FIL) is showing a long-term logarithmic channel that has the potential to cap the upside at $11. Since topping out in March 2021 and more recently in September 2021, FLC’s price has been moving inside a descending channel, unable to break above and below the channel’s limits.
The descending channel came into play near the current all-time low of $4.80 back in mid-June, where it provided strong support. In the short-term, the logarithmic channel is also coming into play near the $11 mark.
This was a key factor contributing to the sell off from the $11.37 high.
As long as the FLC price remains within the channel’s boundaries, we can expect negative sentiment to prevail. However, a weekly break and close above the upper descending trendline has the potential to mark a reversal and open the door for a retest of the next key resistance zone between $18 and $20.
What is a Logarithmic trend Channel?
A logarithmic trend channel is a tool that technical analysts use to predict future price movements. It is based on the idea that prices tend to move in a certain way after reaching certain milestones. For example, if the price of a crypto reaches $10, it is likely to go up by a certain amount before reaching $11. This pattern can be used to predict future price movements.
The weekly Relative Strength Index (RSI) continues to stay below the 50 mid-level, signaling bearish momentum. An early sign of a potential reversal can only come once the RSI breaks above the 50 mid-level.
Looking forward, the first significant support level comes at $6.5 followed by $5.0, which if retested have the potential to provide FLC price with another opportunity to bounce.