Filecoin (FIL) experienced a challenging second quarter, with network performance faltering despite growth in a few sectors. The broader market’s bearish sentiment and the adage “sell in May and go away” appear to have contributed to the slowdown.
Q2 Report Highlights Decline in Active Storage Deals
According to a report by Messari, Filecoin’s Q2 performance was somewhat underwhelming. The report noted a 6% decline in active storage deals compared to the previous quarter, resulting in storage utilization reaching 26%—a modest 3% growth between April and June. In contrast, Q1 saw a 5% increase from Q4, 2023, indicating a slower pace of adoption.
Filecoin Storage Utilization
However, total revenue from fees doubled in the second quarter, rising to $4 million from $2 million in Q1, 2024. Additionally, the network saw the deployment of over 3,700 unique contracts, boosting the total value locked (TVL) on Filecoin Virtual Machine (FVM) to an all-time high of $213 million in Q2.
FIL’s Price Struggles to Recover
Despite these positive developments, FIL’s price did not fare well in Q2. The altcoin’s price dropped 55% between April 1 and June 30, with the decline beginning at the start of the quarter. Most of the correction occurred in April, after which FIL entered a consolidation phase from mid-April to mid-June. During this period, the price fluctuated between $6.3 and $5.2. In the latter half of June, FIL broke out of this range but continued to decline, testing support at $4.2 and struggling to recover since.
FIL-USDT 1-day chart
Investors had hoped for a recovery in Q3, but with a third of the quarter already passed, no significant bounceback has been observed. Over the past week, Filecoin’s price dropped by another 12%, reaching $4.0, raising concerns about a continued bearish trend for the quarter.
Conclusion
Filecoin’s Q2 was marked by mixed results, with significant price drops overshadowing gains in TVL and fee revenue. As Q3 progresses, the market remains cautious, with no clear signs of recovery for FIL yet.
