Joel Frank
Filecoin (FIL), the cryptocurrency that powers Filecoin’s decentralized data storage protocol, has seen a massive near 40% intra-day surge on Friday. The cryptocurrency was last changing hands around $7.5 per token, having started the day under $5.50. Filecoin’s gains since its earlier weekly lows in the $4.60 area now stand closer to 60%, while the cryptocurrency’s gains on the year currently stand around 150%.
Broader cryptocurrency markets are pumping, with Bitcoin and Ethereum both hitting multi-month highs and up 13 and 11% respectively in the past seven days, as crypto performance decouples from that of US equities. This is helping pump Filecoin, though most of its upside can likely be explained by hype ahead of the launch of the Filecoin Virtual Machine (FVM) at the start of next month.
Why is $FIL spiking?
Filecoin Virtual Machine is coming March 1st.
More here: https://t.co/29C1VobSMN
And here: https://t.co/ZqU2Kbi6VB
— DeFibonacci (@DeFibonacc) February 17, 2023
FVM, a partner of Ethereum Virtual Machine, will be its own layer-1 blockchain capable of hosting decentralized applications and accessing Filecoin’s decentralized data storage infrastructure.
Where Next for Filecoin (FIL)?
Filecoin’s latest surge has seen the cryptocurrency clear a number of key resistance levels. Firstly, FIL has been able to break decisively to the upside of its 200-Day Moving Average for the first time since mid-2021. It has also vaulted above a downtrend linking highs going all the way back to September 2022. FIL bulls will now be eyeing a test of July 2022 highs in the $11s per token, a further 50% up versus current levels.
Is It Time to Buy?
Investors should do their own research and due diligence when assessing whether or not to buy any cryptocurrency. If they deem that the cryptocurrency is linked to a good project, as very much seems to be the case with Filecoin, and if they deem the cryptocurrency as offering a good risk-reward, then they might want to consider buying. For example, while Filecoin is up 200% from its late 2022 lows, it is still about 96% down versus its 2021 peaks.
With FIL at a good price (versus the average over the last few years), with the Filecoin project about to implement a major upgrade and with the bulls seemingly in control across the cryptocurrency space, 10x gains over the next few years or so seem more likely that a further 96% drop. That’s a good risk-reward and, as a result, FIL may continue pumping as investors rush in to grab their bag.
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This article was written for Business 2 Community by Joel Frank.
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