Connect with us
Active Currencies 13952
Market Cap $2,421,716,318,549.28
Bitcoin Share 51.64%
24h Market Cap Change $3.01

Chainlink: This pattern can shape LINK’s near-term trajectory

2min Read

Share this article

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.LINK

After sailing within the bounds of a side-channel for nearly three weeks, Chainlink’s [LINK] breakout was quick to register an up-channel (yellow) breakdown. This fall pierced through some critical price levels and found fresher multi-yearly lows.

Given the current market dynamics, the recent bearish engulfing candlestick could propel bearish tendencies in the near term. At press time, LINK was trading at $6.09.

LINK 4-hour Chart

Source: TradingView, LINK/USDT

The buyers upheld the $6.16-level for over 23 months. However, the bulls failed to defend this level as the bears went to great lengths during recent liquidations. The sellers pulled off a 43.7% drop from 10-13 June.

After dragging the alt to its two-year low on 13 June, the buyers finally found a recouping zone at the $5.45-mark. The bullish engulfing candlestick invoked the recent gains while marking the end of the red candle streaks.

With a bearish engulfing candlestick near the $6.88-resistance, the selling pressure seems to have renewed. A sustained fall below the basis line (green) of the Bollinger Bands (BB) could position LINK to a potential downside toward the $5.45-level before any bounce-back possibilities. Also, the fall below the Point of Control (POC, red) could propel an extended fall.

Rationale

Source: TradingView, LINK/USDT

The Relative Strength Index (RSI) failed to breach the boundaries of its equilibrium for the last five days. After its recent bearish divergence with the price, it has depicted a bearish bias.

Also, the OBV did commensurate with the RSI’s outlook by bearishly diverging with the price. Furthermore, sellers have reaffirmed their strength in the current structure while the -DI refrained from a bullish crossover.

Conclusion

In light of the bearish engulfing candlestick inflicting a close below the 20 EMA (red), the basis line of BB, and the POC, LINK could see a near-term bearish cycle toward the $5.4-$5.7 range. Any bearish invalidations could see a relatively sluggish phase near the POC zone.

However, an overall market sentiment analysis becomes vital to complement the technical factors to make a profitable move.

Share

With a background in financial analysis and reporting, Yash is a full-time journalist at AMBCrypto. He has a keen interest in blockchain technology, with a primary focus on technical analysis of cryptocurrencies.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.