- Filecoin price has been in a strong bearish trend in the past few months.
- The sell-off accelerated as doubts about its utility continued.
Filecoin price has plunged in the past few days as investors questioned the network’s utility. FIL crashed to a low of $2.387, which was the lowest level in years. It has collapsed by more than 98% from its all-time high, giving it a market cap of over $1 billion.
Utility for storage blockchains in question
Filecoin is a major blockchain platform that seeks to disrupt the important challenge of file and data storage. Its goal is to disrupt key companies that dominate the storage industry like Amazon, Microsoft, and Google.
Instead of relying on giant storage servers located globally, Filecoin makes it possible for anyone with free storage to sell their free bandwidth. Anyone with a smartphone, laptop, or even home data server can provide storage in the network and then receive payments.
These users are paid using FIL, the network’s token. Other companies seeking to disrupt the storage industry are Storj, Arweave, and Siacoin among others.
Find out how to invest in Filecoin.
At its peak, Filecoin was one of the biggest cryptocurrencies in the world. It was a top 15 crypto as investors believed that blockchain would disrupt the storage industry.
However, there are now concerns about the real utility value of decentralized blockchain projects. For one, the decline of the FIL token means that storage providers don’t have the incentive to provide their bandwidth.
On the demand side, there are concerns about whether people and companies still have a need for another storage platform. Besides, existing platforms like Amazon, Microsoft, and Google work well.
According to Filecoin, its storage platform has 17.6 million terabytes of capacity. It is unclear how much of this data is being used by customers. One of the companies that use Filecoin is OpenSea, the NFT giant. It would take a mountain-load of NFTs to fill the network.
Filecoin price prediction
The daily chart shows that the FIL price has been in a strong bearish trend in the past few months. This decline accelerated during the weekend as bearish bets on the coin accelerated. It has moved below all moving averages while the Relative Strength Index (RSI) has moved to the oversold level.
Therefore, there is a likelihood that the Filecoin price will continue falling as demand for the fallen angel wane. If this happens, the next key support level to watch will be at $2. A move above the resistance level at $4 will invalidate the bearish view.
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