The news of the alleged scam has prolonged a sideways period, and the new downward pressure is not yet worrying. The significant rejection of low prices indicates that there will be no more declines, and there could be a bullish resumption.
Filecoin (FIL) had an excellent performance at the beginning of the year but is now suffering a deep correction that does not allow it to take off. In addition, that cryptocurrency is involved in a scam that seems to be creating more problems for its price.
FIL is trading at around USD 63 and has lost 0.3% in the last 24 hours. Its market capitalization is above USD 7.776 million, and it occupies the 31st position in the cryptocurrency ranking, according to CoinGecko.
The Public Security Bureau of Feng Xian, China, arrested 31 people who work at the Star Alliance Network MLM (IPFS Union) company. At the same time, it seized almost CNY 400 million (equivalent to USD 63 million) worth of Filecoin and other crypto assets.
IPFS made a statement to ensure that the funds and arrests have nothing to do with the company’s business. Although most members have resumed their work, they will be fully back when the investigation ends.
Due to that situation, the price of Filecoin quickly reacted negatively. Fear even exerted pressure again, triggering a daily low of USD 56.86. However, much of the decline in its value has now disappeared.
The Scam Could Further Drag Down the Price of Filecoin
For now, that news is only prolonging a lateral period developing in the last week. In contrast to other cryptocurrencies, the price of Filecoin has been falling very weakly in the past two months.
The alleged scam in which Filecoin is involved is exerting new downward pressure that is not yet concerning.
The weekly chart shows the price is in a small range with resistance at USD 69.82 and support at USD 55.75. If the support level holds, the bulls will have no reason to worry.
The rising lows have allowed the price of FIL to maintain a dominant bullish direction.
There will be a resumption of the previous trend if the price of FIL breaks through the immediate resistance. That would allow it to go much higher soon and reach a relevant resistance at USD 113.71.
An Analysis of the FileCoin Price Daily Chart
The daily candlestick chart indicates tremendous bearish pressure due to the alleged scam involving Filecoin. This event still represents a considerable risk for the evolution of the price of the cryptocurrency.
However, the strong rejection of low prices seems to indicate that there will be no more falls. The buying pressure on the immediate support zone is defending FIL. For that reason, there could be a bullish resumption from the current point.
The price of Filecoin must break through resistance at USD 67.63 to confirm that the bulls will regain control in the short term. It is only a matter of time to see how the market for this crypto asset will develop.
By Alexander Salazar
