Swing failure patterns appeared to be in play on the charts, with much of the altcoin market highly volatile in the hours before press time. While Chainlink touched $15.7 and dived south, Aave’s breakout of a range saw a nasty reversal as well. Finally, DigiByte registered a bearish divergence as well.
LINK rose to $15.7 in what could turn out to be a swing failure pattern. The larger the time frame is, the more likely traders would notice the swing high and gravitate toward the trade, creating more volume.
The OBV showed that the immediate selling pressure was not good enough to outweigh the buying volume of the past ten days. The attempt to rise past $15 was rebuffed with force, while the attempt to dive under $12.6 was also pushed back.
At the time of writing, the market lacked clarity. The $14.55-level has been a stubborn resistance, one that LINK has not closed above for more than a month, while the $12.6-level was only recently reclaimed.
So long as Ethereum does not suffer a significant correction over the next few days, it can be expected that LINK would soon post gains as well, with $12.6 and $12 being important areas of support.
AAVE was trading within the range with upper and lower boundaries at $94.8 and $70.8. A few hours before press time, the price had broken to the upside of the range and saw a candlewick climb to a high of $110.8. However, this was followed by a strong reversal.
The volatility of the past 24 hours could easily have trapped many traders who entered a long position when AAVE saw a breakout. The price tested the mid-point of the range at $82, tested and soared past the $94-resistance, and presented a target of $118 to the upside, yet Ethereum likely had a big influence on AAVE.
Losing the $82-level could see AAVE visit the range lows once more.
DigiByte noted a double whammy recently. Not only did the crypto retrace itself completely after market-wide volatility saw the price surge, but it also exhibited a bearish divergence between the price and momentum.
This divergence primed DGB for losses in the short-term. A correction to the $0.025-support level or the 38.2% retracement level at $0.024 seemed likely for DGB in the near-term.