Fil violence surges, what are the reasons behind it?

Original title: "Filecoin in 2021 is a lot like Polkadot in 2019"

Before the Spring Festival, FIL, which has always been more stable than stablecoins, suddenly soared from around US$22 to US$52.

This round of rise came unexpectedly, like a bolt from the blue.

FIL has experienced dramatic fluctuations and is now at $42.

Maybe it’s because of the Chinese New Year and the fact that there are not many investors, so there is not much discussion about the recent surge in FIL.

Chain Teahouse has made a brief review of the surge in FIL and the recent situation of Filecoin, so the judgment on Filecoin's performance in 2021 has become much clearer.

Reason for the increase: Gas fee may be cancelled

There is no doubt that the current price of FIL is under absolute official control.

This is also why FIL would rise every time it hit the bottom of $21 some time ago, until it hits the bottom of $21 again next time.

Of course, this is not just a way of cutting leeks, but a kind of benign market value management intentionally done by the authorities - the current stable and low price of FIL is conducive to reducing the pledge pressure of miners.

So some people think that this rise was also a deliberate manipulation by the authorities.

The reason is that as miners unlock more and more FIL, they will definitely sell off to cash out, causing a market crash. So the official will pull up the market first to prevent it from being smashed too hard.

But the most direct reason known at present is that there is news that Filecoin may cancel the gas fee in the future.

This means that storage costs will be greatly reduced.

The source of the news is Filecoin officials speaking on the slack channel, revealing that the Filecoin network will undergo mandatory upgrades in the coming weeks.

The new version v1.5.0 includes the FIP-0010 proposal, which is about time-space proof that can be uploaded to the chain without verification.

This not only means saving the biggest expense in gas fees, but also makes the network smoother.

This may be the reason why the official did not drop the price back to $21.

Because the pressure on miners will indeed be reduced in the future, and they can afford to stake FIL at a higher price.

Technical Analysis - FIL is at a critical support level

From February 8th to 10th, FIL soared 115%, setting a record high.

Then the bullish momentum of FIL decreased, and as the surge triggered investors to sell off, the price of FIL has been fluctuating slightly and formed a descending triangle pattern.

FIL/USD 4-hour chart

According to technical analysis from Forex Crunch, the resistance trend line is roughly located at $43. If FIL breaks above $43, it may push further towards $50.

Of course, if the critical support fails to hold, a deeper drop to $34 is likely, a price target that coincides with the 100-SMA.

The current price is at a key support level.

Filecoin Ecosystem in 2021

Technical analysis has always been about analyzing short-term price fluctuations, but in the long run it still has to return to value.

Will Filecoin explode in 2021?

The characteristics of distributed storage determine that this is a very long-term value investment behavior.

Many of Filecoin's performances do not conform to people's perception of high-quality projects in the encryption field. Therefore, many people outside the company judge that Filecoin will gradually fade away.

In fact, the Filecoin network continues to grow , and its current storage capacity is equivalent to thousands of copies of Wikipedia and dozens of copies of the Internet Archive.

Of course, there is not much effective storage in the Filecoin network at present, but we see that the official is working hard in this direction, and initial signs of success have already appeared.

For example, in the past year, the Filecoin Developer Grant Program has funded approximately 40 projects out of more than 140 proposals to incentivize the storage of useful data on Filecoin.

Moreover, these projects also cover various usage scenarios and tools of the Filecoin network.

In addition to the technical construction, Filecoin should also make a lot of attempts at the business level in 2021 and launch various distributed storage-related products.

For example, distributed storage of DeFi+NFT, or decentralized cloud disks.

In short, Filecoin's ecosystem is being built rapidly, which is very similar to Polkadot in 2019.