Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Chainlink’s price has been on the rise since the start of the week. In fact, this has been the trend across the larger crypto-market lately, especially on the heels of Bitcoin’s bull run. Interestingly, even after having risen by over 11 percent, LINK may now be heading towards a trend reversal, one which may result in a slight correction on the charts.
At press time, LINK was being traded at $28.1 with a registered market cap of over $11 billion, making it the 9th-largest cryptocurrency in the market.
Chainlink 4-hour chart
Source: LINK/USD, TradingView
According to the 4-hour chart for LINK, the coin has been trading within the confines of an ascending channel since the start of the month. In the short-term, this may result in a minor price correction as the breakout of an ascending channel formation is often in the bearish direction.
The coin was enjoying a strong resistance level in the $27-$28 range and if the price fails to go past this level, the coin may retrace towards the support at $25.7.
Rationale
Chainlink’s price may soon see a price correction in the short-term if the resistance remains strong. The RSI indicator had moved away from the overbought zone momentarily and at press time, was retracing its steps back into the overbought zone.
Further, the MACD indicator witnessed a bullish crossover at the start of the week, but at press time, showed that there was a slightly higher chance that it may soon register a bearish crossover as the Signal line was close to going past the MACD line.
Important levels to watch out for
Resistance: $27.7, $28.6
Support: $25.7, $23.7
Entry: $27.9
Take Profit: $26.2
Stop Loss: $28.3
Risk/Reward: 3.9
Conclusion
After having traded within an ascending channel formation, LINK’s breakout may be slightly bearish if it fails to go past the key range of resistance highlighted on the chart. In such a scenario, the crypto may head towards the support at $25.7 in the coming days. However, if the range is breached, the coin may continue to head upwards, with LINK likely to flip the resistance into a strong support for the cryptocurrency.
