Filecoin (FIL/USD) price drifted downwards despite the upcoming launch of its virtual machine next week. FIL slumped to a low of $5.85, which is close to its January lows. It has pulled back by more than 38% from the highest level this year.
Filecoin Virtual Machine (FVM) launch
The most important cryptocurrency news is the upcoming launch of Filecoin Virtual Machine, which will happen next week. FVM is a new technology that will happen on March 14 of this year. It will be the biggest upgrade in the platform’s history.
For starters, Filecoin is a blockchain project that seeks to disrupt the storage industry. It works by letting anyone share their free storage and earn a return doing so. Companies like Amazon, Microsoft, and Google that provide cloud computing services can take advantage of this technology. Instead of using centralized servers, they can leverage on the community’s free storage.
Recently, however, there have been concerns about Filecoin’s utility considering that Web2 platforms by companies like Amazon and Microsoft work just fine. And, demand for Filecoin’s in non-fungible token (NFT) storage appears to be thinning.
Filecoin will launch FVM service next week. This product will incorporate smart contracts and provable storage. FVM will bring user programmability to Filecoin and unleash the enormous potential of an open data economy.
As a result, developers will be able to build decentralized applications (dApps), which will take advantage of its storage platform. Some of the top applications for these dApps are collateral lending, liquid staking, and other insurance protocols.
However, the challenge for Filecoin FVM is the fact that the industry is getting significantly competitive. In addition to layer-1 platforms like Ethereum and Solana, there are other layer-2 networks like Arbitrum, Polygon, and Arbitrum.
Filecoin price prediction
The 4H chart shows that the FIL price has been in a strong bearish trend in the past few weeks. It is now sitting at the important support level at $5.86, which was the highest level on Febraury 2. The coin has moved below the 50-period and 25-period moving averages.
It has also formed a bearish channel that is shown in green. The price is between the descending channel while the MACD has formed a bullish divergence pattern. Therefore, Filecoin will likely continue falling as sellers target the key support level at $5. A move above the resistance at $6.26 will invalidate the bearish view.