A new day and a new high for Bitcoin and many other altcoins. However, despite the surge witnessed earlier, the crypto market has been noting a period of consolidation as the buying pressure lowers. Chainlink [LINK] has been major crypto in the market that has been able to carve out a niche in the decentralized finance ecosystem and has been trading upwards since the start of the month.
With a market capitalization of $13.96 billion, Chainlink’s native token LINK slipped to the ninth position on the CoinMarketCap list. At the time of writing, the digital asset was being traded at $34.42.
Chainlink daily chart
Source: LINKUSD on TradingView
The above chart of LINK highlighted the price increasing within an ascending channel. The price has increased by at least $10 within the channel, but there could be a negative breakdown for the price going forward.
Reasoning
Despite the bullishness in the market, there could be a trend change making its way into the LINK market. The Bollinger Bands have been seeing the market become more volatile as the bands diverge. Meanwhile, the 50 moving average along with the signal line remained under the candlesticks serving as a support.
Whereas, the relative strength index has remained close to the overbought zone. This suggested that there were more buyers in the LINK market than sellers. The indicator had briefly entered the overbought zone, however, it has retraced its steps.
A correction could make its way to the LINK market as it has been saturated by the buyers and its indicators were in the extremes.
Important levels
Entry-level: $26.65
Stop-level: $37.82
Take profit: $26.65
Risk to Reward: 1.27
Conclusion
The Chainlink market has been witnessing a strong price surge, however, the pattern may result in a breakdown. This could result in the value of the asset dropping to support close to $26 in the coming week’s time.
