Filecoin is down by almost 2 percent in today’s trading session. The drop extends yesterday’s bearish trend that resulted in the crypto dropping by 2 percent. However, despite the drop, Filecoin has been in an aggressive bullish trend this year, which has seen its value go up by over 50 percent.
Part of the reason we have seen Filecoin price recovering and surging by over 50 percent in the first 15 days of this year has been due to changes in the fortunes of the cryptocurrency industry. Following months of the aggressive bearish trend in 2022, which saw the industry’s market capitalization dropping below $800 billion, the current push to the upside has played a significant role in also pushing altcoins such as Filecoin to the upside. The result of this industry-wide bullish push has been an aggressive trend to the upside.
Also, Filecoin’s fundamental factors, such as being in a niche that is likely to grow for the next few years, have also played a significant role in the current bullish push. As I stated in my previous Filecoin analysis, which looked at the chance of seeing a bullish push of the crypto, the growing need for new computational power, and storage space; we will continue to see its utility pushing its value to the upside.
Is Filecoin Poised for Recovery in 2023?
Despite the factors listed above, which are contributing to the current bullish push of the crypto, I remain bearish on Filecoin. For starters, the current bullish trend of the industry is likely, not long-term. Therefore, we might start to see Bitcoin price returning to trade below the $20,000 price level again, which will impact the Filecoin price due to their significant correlation.
The current Filecoin push to the upside is also likely going to stop as seen last year, whereby despite it having utility, it continued to plunge throughout the year. In my opinion, the crypto industry is currently undergoing an uncertainty phase, whereby despite all signs showing a likelihood of a bullish trend, the conditions change drastically, resulting in an industry-wide price plunge or, in Filecoin’s case, a crypto-specific price drop.