Bulls are targeting Filecoin (FIL) of $ 100 after data suggests fundamentals are improving


Some traders have said that Filecoin (FIL) has lost its momentum because the current price of $ 64 is more than 70% below its all-time high of $ 238. However, this decentralized data exchange platform is showing signs of increasing adoption and this could cause the FIL token price to accelerate its current upward trend.

The FIL token is used to buy storage space and to pull data from the Filecoin network. At the same time, users will receive rewards for selling their excess storage through this open source platform. To compete with existing centralized cloud storage services, Filecoin has economic incentives to ensure files are reliably stored over time.

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Filecoin (FIL) price at Coinbase in USD. Source: TradingView

Notice how the past three weeks have shown a potential return to the previous downtrend move. This upward channel suggests support around $ 90 through mid-November and resistance near $ 107, a gain of 55% from current price.

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Partnerships and adoption could pave the way to $ 100

On September 14th, Filecoin announced a referral program for users who bring members with records greater than 90 terabytes. The network hit 9,000,000 terabytes in August, and according to their website, there are over 3,000 systems and storage vendors providing capacity for more than 400 applications.

On October 13th, Filecoin announced a storage collaboration with Flow Blockchain, supported by Dapper Labs. The service will set up decentralized data storage for non-fungible tokens (NFTs) along with the associated media values. Flow’s platforms include Eternal, Starly, Versus and the upcoming multiplayer online game Chainmonsters.

More importantly, the daily Filecoin token release declines 23.8% on October 15 to mark a year since the mainnet launched. Specifically, this concerns the 7.5% share of early investors, which after the three-year issue period corresponds to 150 million FIL tokens.

Filecoin will arouse open interest in the future. Source: Bybt

Since September 30th, open interest in Filecoin futures has increased 45%, suggesting that investor interest is finally picking up. This metric represents the total number of contracts in play, regardless of whether they were actually traded on a particular date.

Glass half full: The financing rate has scope for leverage for buyers

To assess whether the market is bullish, one should analyze the funding rate of the perpetual contracts. Even if the open interest of buyers and sellers is the same at all times, leverage can vary. When buyers (long positions) demand more leverage, the financing rate becomes positive. Thus, they pay the fees to the sellers (shorts).

However, the reverse situation occurs when shorts require additional leverage and this causes the funding rate to go negative.

Filecoin Perpetual Futures 8-hour financing rate. Source: Bybt.com

The graph above shows a brief period of excessive debt build-up from buyers (longs) in early September when the funding rate hit 0.10% or 2.1% per week. More recently, Filecoin’s funding rate exceeded 0.06% per 8 hours when the FIL token struggled but failed to break through the $ 80 resistance on October 8th.

For now, derivatives metrics are showing little evidence that investors have given up on Filecoin, even though the price is 70% below its all-time high of $ 238. The recent partnership with Flow Blockchain, increasing network usage and capacity, and reduced token emissions suggest a possible continuation of the previous three-week upward trend. Nothing seems to stop the FIL from hitting the $ 90-107 range in November.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement carries risks. You should do your own research when making a decision.