Bulls are targeting Filecoin (FIL) price of $ 100 after data indicated improvement in fundamentals

Some traders have said that Filecoin (FIL) has lost momentum because the current price of $ 64 is more than 70% below its all-time high of $ 238. However, this decentralized data exchange platform is showing signs of growing adoption and this could cause the price of the FIL token to accelerate its current upward trend.

The FIL token is used to buy storage space and to pull data from the Filecoin network. At the same time, users are rewarded for selling their excess storage through this open source platform. To compete with existing centralized cloud storage services, Filecoin has financial incentives to ensure files are stored securely over time.

Filecoin (FIL) price chart in USD (Coinbase). Source: TradingView

Notice how the past three weeks have shown a potential reversal from the previous downward move. This ascending channel suggests support at $ 90 in mid-November and resistance near $ 107, which would represent a 55% gain from current price.

Partnerships and adoption could pave the way to $ 100

Bulls are targeting Filecoin (FIL) price of $ 100 after data indicated improvement in fundamentals
Bulls are targeting Filecoin (FIL) price of $ 100 after data indicated improvement in fundamentals

On September 14th, Filecoin announced a referral program for users with members who have records larger than 90 terabytes. The network hit 9 million terabytes in August, and according to its website, there are more than 3,000 systems and storage vendors serving more than 400 applications.

On October 13th, Filecoin announced a storage collaboration with Flow Blockchain, supported by Dapper Labs, which will set up decentralized data storage for NFTs along with associated multimedia assets. Flow’s platforms include Eternal, Starly, Versus, and the upcoming online multiplayer game Chainmonsters.

More importantly, the daily issuance of Filecoin tokens will drop 23.8% on October 15th, marking a year since the mainnet launched. This applies in particular to the 7.5% share of the first investors, which corresponds to 150 million FIL tokens after the 3-year issue period.

Open interest in Filecoin futures. Source: Bybt

Since September 30th, open interest in Filecoin futures has increased 45%, suggesting that investor interest is starting to increase. This metric represents the total number of contracts in play, regardless of whether or not they were traded on a particular date.

Glass half full: The financing rate allows leverage for buyers

To assess whether the market is sloping up, one needs to analyze the funding rate for perpetual contracts. Although the open interest of buyers and sellers is the same everywhere, leverage can vary. When (long) buyers demand more leverage, the financing rate becomes positive. Thus, they are the ones who pay this fee to the (short) sellers.

However, the reverse situation occurs when shorts require additional leverage and this causes the funding rate to go negative.

8-hour financing rate of perpetual Filecoin futures. Source: Bybt.com

The graph above shows a brief period of excessive leverage from buyers in early September when the funding rate hit 0.10%, or 2.1% per week. More recently, Filecoin’s funding rate exceeded 0.06% for 8 hours when the FIL token battled but failed to break the $ 80 resistance on October 8th.

Derivatives metrics currently show little evidence that investors have given up on Filecoin, even though the price is 70% below its all-time high of $ 238. The recent partnership with Flow, the increased usage, network capability and the reduction in token issuance suggest a possible continuation of the upward trend that began three weeks ago. Nothing seems to stop the FIL from hitting the $ 90-107 range in November.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you will need to do your own research when making a decision.

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