- Filecoin price crashed hard after the launch of FVM platform.
- Investors bought the rumors and are now selling the news.
Filecoin price dipped sharply on Wednesday even after the network launched its highly anticipated FVM product. FIL crypto crashed by more than 10% in the past 24 hours to trade at $6.15. This price was about 20% below the highest point this week, meaning it has moved to a bear market.
FVM launch fails to excite
Filecoin is one of the top Web3 projects in the industry. It is disrupting the file storage industry by making it possible for people to share their file storage for a fee. Filecoin is used widely in the blockchain industry, especially in the non-fungible token (NFT) industry.
However, for a long time, there have been concerns about the viability of the product considering that web2 products like those offered by Google and Microsoft work just fine. Recent on-chain data shows that the usage has been relatively low in the past few months.
Therefore, this week was an important one for the Filecoin ecosystem as the developers finally launched the Filecoin Virtual Machine (FVM) product. This is an important addition to the ecosystem that will make it easier for people to build applications on its ecosystem.
Read more: How to buy Filecoin.
According to Filecoin, the FVM will make it possible for developers to build decentralized applications (dApps). These dApps will be in key industries like collateral lending, liquid staking, and even non-fungible tokens.
Most importantly, Filecoin’s FVM will be compatible to Ethereum, the biggest smart contract platform in the world. However, the biggest risk, which explains why the token has retreated is that there are concerns about whether it will become a successful product.
Launching is one thing, getting people to use it is the other thing. Besides, the industry is highly competitive, with platforms like Avalanche, Cosmos, Mantle, and Arbitrum taking market share. The decline is likely because of a situation known as buying the rumour and selling the fact.
Filecoin price prediction
The 4H chart shows that the FIL crypto price rose ahead of the FVM launch and then pulled back. This is a sign that investors were buying the rumour and now they are selling the news. It remains slightly above the key support at $5.68, the lowest point on March 3. It is also above the 25-day and 50-day moving averages.
Therefore, the coin will likely continue falling as sellers target the next key support level at $5, which is about 19% below the current level. The stop-loss of this pattern is at $6.5.
