Chainlink: Why holding this level will be key for a bull revival
After coasting within the bounds of a down-channel for nearly a month, Chainlink [LINK] pierced through some critical price ranges in the last few weeks. In the recent bear run, the sellers kept sinking the resting grounds only to find fresher multi-month lows.
Giving due importance to the existing market structure, the current candlestick could propel bearish tendencies in the coming times. At press time, LINK was trading at $11.17, up by 1.4% in the last 24 hours.
LINK 4-hour Chart
Despite upholding the $11-mark for over 15 months, the bulls failed to defend this level after the bears put their best foot forward in the recent sell-offs. Naturally, it became possible for them to pull off a 41.74% drop over the last month.
Protecting the $13-$14 range was vital to continue a gradual recovery on LINK’s troughs. But the late April sell-off entailed a bunch of bearish engulfing candlesticks that pulled LINK below all the vital price points. After pulling the alt to its 16-month low on 1 May, the buyers finally found a recouping zone at the $10.6-mark.
Should the 20 EMA (green) continue to pose barriers, a further pullback can cause a test of the median (red) of the pitchfork at the $10.8-level. Further, with the lower and upper band of Bolinger Bands (BB) looking north and south, respectively, LINK could curb its volatility in the coming times.
The Relative Strength Index failed to test the boundaries of its equilibrium for the last 12 days. Thus, it visibly depicted a seller’s market while looking south.
Also, the CMF corresponded with the recent recovery but refrained from crossing above the zero-mark. So, the buyers still needed to up their game in order to claim an edge in the current scenario.
Given the past tendencies of LINK to succumb to the 20 EMA, the alt could see a short-term pullback. This trajectory could rest at the median of the pitchfork before LINK enters a tight phase and finally commits itself to a steep trend.
Finally, an overall market sentiment analysis will be vital. Especially to complement the technical factors and ascertain a profitable move.