Filecoin Surges Past $7 Amidst FOMO Rally

Despite positive indicators, Filecoin’s ecosystem faces challenges, including a decline in total value locked and issues with the Filecoin EVM.

On Monday, the price of Filecoin (FIL) skyrocketed as cryptocurrency investors adopted a Fear of Missing Out (FOMO) mentality. The token surpassed the critical $7 level of resistance. Presently, it has been at its maximum elevation since the 2nd of January of this year.

The ecosystem has witnessed a significant liquidation of short-sellers due to Filecoin’s ascent.

In the preceding twenty-four hours, short liquidations surpassed $3.2 million, according to data from Coinglass; this is the highest amount since December 31. Bull liquidations for the same period amounted to a mere $778k.

When brokers are compelled to end market positions, liquidations occur. Short liquidations happened because most short sellers were forced to close. After all, they were unable to satisfy their margin requirements.

In the interim, further information revealed that open interest in the futures market increased with the Filecoin price surge. In the preceding twenty-four hours, this open interest increased by 15% to exceed $291 million, or 40.32 million FIL.

Binance contributed most of this $122 million in open interest, followed by OKX, Bybit, BingX, and Bitget. A rise in open interest indicates robust demand in the futures market, which is a highly positive indicator.

Nonetheless, the problem for FIL is that its ecosystem is struggling. There are indications, for instance, that the FIL EVM, introduced amid much fanfare in 2023, has encountered difficulties.

Challenges in Filecoin’s Ecosystem and Integration with Solana

According to information compiled by DeFi Llama, the ecosystem’s total value locked (TVL) has decreased to $829k. This is less than the peak of over $3.3 million from the previous year.

The TVL has reached an all-time peak of more than $364 million, a positive development when liquid staking is considered. Prominent liquid stakers for Filecoin include GLIF, STFIL, and SFT Protocol.

Individuals can stake in a more decentralized and adaptable fashion using liquid staking.

The integration of Filecoin with Solana, a global leader in decentralized public infrastructure (DePin), was an additional significant development. Solana is renowned for its affordable transaction fees and quick processing times.