"This too shall pass. It may pass like a kidney stone. But it will pass." That's exactly what long-term holders of Filecoin must tell themselves at this point. Unsurprisingly, FIL has capitulated significantly from its all-time high. At the time of this analysis, the token was trading at $18.13, down more than 90% from its high in April 2021.

It is worth noting that the project showed a lot of promise, but did not really translate into its price behavior. After September 6, 2021, investors have been wondering if this is a long-term downtrend or just a good time to "buy low".

This is the answer

While Bitcoin has been struggling to cross its psychological levels, FIL appears to be dormant in this regard. Short positions have been driving the FIL market for a long time. In the current market structure, then, FIL could test its local top at $21.68 to the upside if the bulls defend and apply pressure. And, if there is selling pressure, the token could fall below its lower limit of $16.98.

At the time, the Filecoin market needed buyers to counter the long-term bearish momentum. However, it is important to note that many investors would rather give up and cut their losses due to the mediocre performance of the token. Investors who bought tokens during the bear market of September 2021 must be feeling guilty now.

It is also interesting to note that despite the increase in trading volume at certain times, the price did not react equally to this. At the time of writing, the RSI is at the 49 mark, looking south. It is worth noting that the technical picture clearly shows that the current market does not offer a "buy-on-dip opportunity".


Source: TradingView, FIL/USD

But what about the indicators?

Then, the price K-chart may not reveal potential money-making opportunities. But on-chain indicators reveal the true picture. And, in the case of Filecoin, the situation looks both tedious and worrisome. On-chain trading volumes have unexpectedly fallen. While there have been some rallies in 2022, none of them have matched the highs of 2021. This is a clear indication that traders have been closing out their positions. In fact, long-term holders have been choosing to sell their tokens as well.


Source: Santiment

To keep investor sentiment strong, the social dominance of the token plays an important role. Well, after November 10, 2021, FIL's social dominance has been below zero. It's just to balance out the lack of discussion about the token even during the bull market. Simply put, Filecoin has not been getting the attention of investors willing to make money.


Source: Santiment

Among all the negative signs, it is worth noting that development activity has been increasing despite the sharp drop in prices. In fact, the Filecoin team seems to be upgrading its game after December 2021. At the time of this analysis, development activity remained strong at 48.45 counts. However, it remains to be seen if development activity alone can bring FIL to the price K chart.


Source: Santiment