Filecoin has grown tremendously for the better part of 2021 with a growth rate of 70% recorded within three days. However, financial analysts project that a recession is looming in the coming days.
Filecoin has been one of the best performing cryptos in the market in 2021. This crypto made a name for itself in the market through its native token FIL. This token achieved great yields for the better part of the year. However, despite its latest performance, statistics show that a recession period may be looming nearby and investors are becoming uncertain about their returns.
The growth of Filecoin started after it integrated Chainlink, which is an oracle service. This integration enabled Filecoin to automate their storage systems and they were able to easily link Filecoin networks with well-performing blockchain contracts. The merger also created a 3.0 infrastructure for FIL, which made it easy for developers to make computations outside the chain.
The announcement of Filecoin’s merger with Chainlink increased the price of the FIL toke by 67%. This growth rate was historical in the blockchain market because even though a new token, FIL was able to rank above major cryptocurrencies in the market in terms of market capitalization. Before the merger, the FIL price was going for $82.60 but this rose to $137.80 after a short time.
The merger was not only helpful in increasing the yields for current investors but it also helped to attract new investors to buy the token. In the period for the merger, the social media presence for Filecoin also increased with a record high percentage of 2600%. This move also gave Filecoin a mention on Santiment as one of the most prominent emerging trends.
Whilst this price shoot was good for Filecoin, it can be very detrimental to investors in the long term because the prices will balance themselves due to the forced of demand and supply.
One of the metrics that have projected the looming recession of Filecoin is Momentum Reversal Indicator (MRI). The MRI index indicated that the price growth was about to end after a decline in demand. However, the slow growth or decline will be evident only when the Filecoin prices reduce to $124. The expected redundancy projections are expected to lower to 61.8% or even lower to 50%.
However, the metrics do not mean that the prices mat not rise again in future. Filecoin’s prices may continue to grow beyond their current limit, making the move even more favorable to investors.