Filecoin price forecast as FIL juggles between two order blocks

• Filecoin price is up 12% after an 8% slump to the monthly low of $2.970 recorded on September 11.
• FIL could fall 5% to test the $3.233 support level, with a possible breach to collect the liquidity resting underneath.
• Invalidation of the bearish outlook would occur if the altcoin records a decisive 4-hour candlestick close above $3.500.

Filecoin (FIL) price is trading with a bullish bias, after sustaining the uptrend for the last three days. However, the rally could be interrupted by selling pressure from a crucial zone, unless bullish momentum takes prominence.

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Filecoin price eyes 5% slump

Filecoin (FIL) price is on a recovery rally after a 16% fall from the August 31 crash.  Having ascended almost 15%, the altcoin is facing a supply zone at around $3.400. This is an order block where sellers abound. As such, it is populated by aggressive sellers, thereby presenting as a likely area for FIL to be rejected if the order block holds as a resistance level.

A rejection from the supply zone at $3.400 is likely to send Filecoin price down toward the $3.233 support level, or lower to tag the demand zone at around $3.200. A demand zone is an order block where strong buyer momentum is expected. As such, this could be where FIL pulls back again, but it all depends on whether this order block at around $3.200 will hold as a support level. If it does, a quick dip into the demand zone would be likely in what is considered a liquidity sweep before a run-up north.

However, if the demand zone fails, Filecoin price could extrapolate the losses failing the demand zone and rendering it a bearish breaker.

The Relative Strength Index (RSI) at 71 is headed north, suggesting rising momentum. However, its position above 70 borders along being overbought, which means Filecoin price is at risk of a drawdown. However, this is pending confirmation, which would happen once the RSI crosses below the 70 level to the downside, thereby confirming Welles Wilder’s interpretation of an overbought asset.

FIL/USDT 4-hour chart

Based on the trajectory of the RSI and the overall outlook of the Awesome Oscillator (AO) whose histograms are soaked in green, the upside potential for Filecoin price remains plausible. In this case, FIL could shatter the supply zone, failing it as a resistance level and converting it to a bullish breaker. A move north would likely lead the altcoin to the $3.500 resistance level, last tested in late August. 

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