Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Chainlink has been witnessing an uptick in its value lately, despite the volatile nature of the market. Although some of the market’s altcoins were stuck in a consolidation phase, LINK’s price was moving like a wave forming crests and troughs.
At the time of writing, LINK’s value was observed to be part of the latest trough formation on the price charts, with the altcoin trading at $29.45 with a market capitalization of $12.06 billion.
Chainlink four-hour chart
Source: LINKUSD on TradingView
As was highlighted by Chainlink’s four-hour chart, the digital asset dropped close to the $22-level, following which, the altcoin’s price retraced again. Soon after, however, the price registered a sudden hike in value, with the cryptocurrency climbing to touch $32.
In light of LINK’s price moving along the support at $29.36, with the same forming a part of a descending channel, a breakdown in price could be imminent.
Reasoning
The general volatility in the market has fallen lately, due to which the price seemed to be forming lower highs on the charts. Further, the Signal line also snuck up over the price candlesticks, highlighting the rise of bearish sentiment in the market.
With the volatility escaping, the momentum in the market fell too. At press time, the said momentum was leaning towards turning negative. With the price picturing a strong southbound trend, a breakdown from the pattern will push the momentum into the negative zone for real.
Meanwhile, the Relative Strength Index has been close to the equilibrium zone for the past couple of days. While the selling pressure was observed to be rising, the indicator noted a reading of 47 at press time.
Crucial levels to watch out for
Entry-level: $28.98
Take Profit: $27.16
Stop-level: $29.97
Risk to Reward: 1.84
Conclusion
Chainlink’s four-hour chart indicated that a fall was on the way, pulling the value of LINK to under $28 while allowing to earn a profit of almost $2 for short traders. However, since the altcoin market has been moving more independently recently, traders may want to watch out for sudden volatility.
