Traders Intend to Push Filecoin Above $100
Derivatives data suggests that retail traders are bullish on Filecoin (FIL).
Filecoin hit an all-time high of $235 on April 1st. But after the cryptocurrency went down and fell 67% below this level. However, Filecoin (FIL) has amassed a 65% gain over the past month, reaching its highest price since June 8th.
Already on August 6, this growth accelerated following a partnership with the Chainlink oracle protocol, which allowed projects to join their grant initiatives to accelerate the development of hybrid smart contracts.
What triggered the rally?
On March 17, digital currency asset management company Grayscale Investments announced the launch of its Filecoin investment vehicle.
A few days after that, the creation of a $23 million Filecoin ecosystem fund was announced, backed by major Chinese investment groups such as Fenbushi Capital, SNZ Capital and EcoFund Neo.
On March 31, Qtum founder Patrick Dye announced that the protocol is now working to enable smart contracts for Filecoin over the Qtum network.
On April 10, Martin Gaspar, an analyst at the CrossTower exchange, said that strong demand from Chinese miners arose due to insufficient health checks. He added that these miners “are required to pledge the FIL token as a collateral, which has led to a demand for the token.”
Already on April 15, Filecoin changed its supply economy, reducing its daily emission from 648,000 FIL per day to 365,000, which was perceived by the public as a token shortage. This may have prompted retail investors and miners to speed up their investments.
Is retail activity growing?
The above data indicate that the funding rate increased between August 10 and 17 and reached an average positive value of 0.08%. This number is 1.7% per week, which indicates an increase in the activity of long positions with leverage. After declining for a couple of days, the indicator triggered a new rise to 0.10% in commission charged every 8 hours on long positions.
The current weekly equivalent of 2.1% in commission indicates even stronger leverage on the part of retail traders. This indicates their optimistic attitude.
It is, of course, difficult to predict whether the recent move will be sufficient to further sustained price increases. However, it looks like traders intend to push Filecoin closer to the $100 level.