Connect with us

Analysis

Chainlink: An ideal buy signal may come around if this happens

Published

on

Source: Pixabay


Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

Chainlink has recorded a surge of nearly 60% in the last two weeks. In fact, LINK hiked from its swing low of $15.6 to a near two-month high of $25. What’s more, its movement has been complemented by a continuous rise in network activity and active addresses. Ergo, the near-term outlook for LINK seemed promising. However, there may be some conflicting signs in the market too.

At the time of writing, LINK was being traded at $24.35, up by 3% over the last 24 hours.

Chainlink 4-hour chart

Source: LINK/USD, TradingView

Since rebound from $13 on 21 July, LINK has formed three up-channels, two of which have resulted in a breakout. The first breakout saw a hike of 10% as the price moved above its 25 June swing high while the second triggered an 11% jump above LINK’s 20 June high of $22.

A third breakout from LINK’s current up-channel would now ideally result in a move above LINK’s 15 July high of $26.46. Moreover, LINK’s daily 20-SMA also crossed above its 50-SMA (not shown) – A bullish signal.

Reasoning 

While LINK steadily reclaimed its June levels, there were some warning signs, however. The RSI has formed lower peaks since 31 July and indicated a bearish divergence with respect to LINK’s price action. A move below the 50-45 range in the coming sessions would validate a weakening trend.

Momentum also dropped during this period, according to the Awesome Oscillator. Even so, the same managed to stay above the half-line. However, the OBV seemed to disregard these cues and maintained its upwards trajectory due to mounting buying pressure.

Conclusion 

If bearish divergences do come into effect, LINK might dip to the lower trendline of its pattern. This would present an ideal buy signal for traders in case the price breaks north from the up-channel and rises above the 15 July swing high of $26.46.

Read the best crypto stories of the day in less than 5 minutes

Subscribe to get it daily in your inbox.


Please select your Email Preferences.

A business graduate with a keen interest in emerging markets across South East Asia. As a financial journalist, he covered stocks and market reports across Australia and New Zealand as well.

Click to comment

Leave a Reply

Your email address will not be published.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.