In the feedback on Sunday, we got a chart request for $FIL. Let’s deepdive on it!

$FIL is the token for Filecoin, which is a decentralized file storage system. Some people are linking $FIL to the AI trend, claiming AI agents will need to store files somewhere. It’s a flimsy connection, but sometimes markets don’t care.

Jesse posted this very high level chart almost month, showing targets up to $100:

The monthly chart

When we start a new chart, we like to see what the monthly chart is telling us. The higher timeframes give us the best sense of the overall trend.

We like to find the chart with the most history, which happens to be Binance.

Defining the monthly range

The first thing that we can see on the monthly chart is the high timeframe range that price has been in.

1. $10 has been key resistance

   Price has tested $10 as resistance in three months and has yet to have a monthly close above it.

2. $3 is monthly support
   There haven’t been any monthly candle closes below $3. This is our range low if crypto were really to tank.

3. $FIL has spent 24 months between this support and resistance
   This is an accumulation range. Often, the longer its in a range, the bigger the breakout.

The monthly trend

The next thing we try to identify is the trend.

We can see some positive signs here:

1. $FIL broke the 30-month downtrend diagonal
   Corrections don’t only happen in price, they also happen in time. After reaching a high of ~$230, $FIL has spend 30 months declining 99% in price—brutal if you were a hodler at the top.

2. RSI broke 50 last month
   The biggest moves for $FIL will happen when RSI breaks 50 (and probably 60). Last month, it broke the 50 for the first time, but was rejected at the high timeframe resistance.

3. RSI trend is positive
   However, the trend for RSI is up. Right now it’s bouncing off the trendline and as long as it doesn’t break the trendline, we’ll consider it positive.

4. Price is finding support at the dots
   Often times, the trending dots on the Sharp Shooter Indicator can serve as support. Because there’s a wick forming at the dots, that’s an indication, there’s buy support there.

The Weekly Chart

On the weekly chart, we can see a slightly different story:

Price & RSI

1. RSI downtrend is below the 50- RSI is the first thing we’d look at and it’s showing that the momentum is down. When RSI starts to break this line to the upside and crossing the 50, it becomes a high probability reversal.

2. Price is in a downtrend - Similarly price is in a downtrend, marked by the diagonal.

3. Price is below the trending dots - Price will need to regain the trending dots to be bullish.

It’s possible that this consolidation could take a few weeks to play out.

Volume profile

We also pulled the volume profile from the start of the move in October through today. It tells us where most of the volume for $FIL has been traded.

It tells a slightly more bullish story.

1. Price bounced off the Point of Control, where most volume has been traded. This is signified with the redline. Above the point of control is bullish and makes it more likely price goes back to the value area high ~$8.50.

2. A lot of volume has been traded under the point of control, and there’s big gaps to fill higher. This volume traded below can act as support.

3. The value area low ~$4.10 will act as support, and value area high at $8.50 will act as resistance. If bitcoin were to retrace back to $52K, we might expect $FIL to also head back to $4.10, and if it breaks all-time highs, we might expect $FIL to break above $8.50.

For now, it’s most likely that $FIL trades between the Point of Control ($5.85) and the Value Area High ($8.50) until a bigger breakdown or breakout.

Daily chart

The $FIL daily chart is telling a similar story to the weekly chart.

1. Price is in a donwtrend, beneath the trending dots, waiting to regain.

2. RSI is waiting for a breakout from its downtrend and get back over 50.

3. If price breaks its uptrend, it might head back to the weekly Value Area Lows ~$4.

4. We have two trendlines price could break as it gets more bullish and gets back above the trending dots.

Bonus: $FIL / $BTC

The last thing I’d look at is how $FIL is trading against $BTC.

At any point in time, investors have a choice: Should I buy this altcoin, which is risky? Or buy bitcoin which is relatively safe?

Altcoins tend to make their biggest moves when they’re bullish against bitcoin.

$FIL right now is not bullish against bitcoin. Weekly prices are continuing to make new lows against bitcoin, and RSI is in a downtrend on the weekly.

Investors are still more bullish on bitcoin than they are on $FIL.

Overall assessment

$FIL is likely in a period of consolidation and may take some time before a larger breakout.

We’re watching to see if RSI can break the downtrend on the daily first and then the 50 second. Then we can watch the higher timeframes for follow-through.

With $FIL making fresh lows against bitcoin, bitcoin still seems to be the favored investment compared to $FIL for the time being.

We haven’t done this kind of deep dive on an altcoin chart before. Let us know what you thought.

Want more of this? Less? Too detailed? Not detailed enough? Let us know!

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Disclaimer

The contents of this newsletter are expressed in my opinion only, none of which is financial advice. Always do your own research as this information is intended for educational & entertainment purposes only.