Over the past few months, decentralized storage platform Filecoin has not fared well on the K chart. It has lost nearly 72% of its value since October, falling from $80 to $22.30 at press time. It hinted at the start of a downtrend in late September and has been steadily declining on the K-chart since October. At the time of this writing, an important trend line appears to have been broken. Short-term bullish sentiment has been brewing over the past week. However, the most relevant question is – can Filecoin break the bearish market structure in the next few weeks?

Filecoin has been in a relentless downtrend, keep a close eye on this level

Source: FIL/USDT on TradingView

The trend line (white) has some importance, mainly due to how the price has respected it since November. However, it is important to remember that a breakout of a downtrend line is not the same as establishing an uptrend. Instead, such a breakout could mean a rise before the next move lower in FIL.

Therefore, FIL will continue to trade within a long-term bearish structure unless the previous low of the market structure at $31.53 is broken.

In addition, this lower high has some confluence with the 23.6% Fibonacci retracement of the level (yellow). This level is plotted based on the FIL's move from $81.22 to $16.82. Therefore, if FIL can indeed climb that high, then the $31 to $32 area is expected to provide strong resistance.

Another place where FIL could encounter sellers is at $27, below the low prior to the $16.82 low. A retest of the $27 handle could be seen as a bearish retest of the support level where FIL traded last month.

Fundamentals

Filecoin has been in a relentless downtrend, keep a close eye on this level

Source: FIL/USDT on TradingView

Indicators do not yet show a long-term trend change in FIL. The RSI on the 12-hour chart formed a bullish divergence in oversold territory last month. Since then, the RSI has steadily climbed and broken above the neutral 50 line, although it may be rejected at the 57 or 60 value of the RSI, which has happened in the past.

The CDV does show decent buying volume on the recent rise in FIL, but not enough to break the downtrend. Similarly, the Directional Movement Index shows that the strong bearish trend of the past month may have changed as the +DI (green) broke above the 20 mark and the ADX is above it. This reflects the steady increase over the past few weeks.

Conclusion

The long-term downtrend has not been interrupted, but Filecoin could rise to the $27 and $32 levels. Taking these levels beyond to support will provide evidence of a change in trend.