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

Since reaching the ATH on May 10, Chainlink (LINK) bears have made a point to mark lower highs while testing the 15-month trendline support (now resistance, yellow) for the past nine months. The most recent drop pushed LINK below the above support as it marked a bearish flag on the daily chart. At the time of writing, LINK was trading at $18.47.

A convincing close below $17.8 would increase the likelihood of a likely collapse. Should the February 9 candlestick close in green, it would be a classic bullish pin bar that could stimulate a retest of the upper trendline near the USD 20 level.

Source: TradingView, LINK/USDT

The most recent sell-off (starting January 11) caused the alt to lose more than half its value, dropping to its six-month low on January 24. As the support at the $15.11 level has historically (more than a year) served as a strong buy zone, LINK reversed and formed an up-channel on the daily chart.

While the bearish flag dipped below the 15-month support (now resistance), the current price was still not overloaded from its 20 SMA (red) and 50 SMA (cyan). This increases the chance of high volatility in the coming days. Also, the price saw its first retest after breaking support. But it still had to mark lower peaks and troughs to confirm that it is not a false breakdown.

So a drop below $17.8 would undeniably be a crucial coincidence to reaffirm LINK’s bearish tendencies. Close monitoring of the February 9 candlestick would be vital to pinpoint a possible retest of the upper trendline. Given the continued bullish pressures of the past week, one cannot ignore the possibility of a false breakout.


Source: TradingView, LINK/USDT

The RSI saw a rebound out of oversold territory but struggled to claim a bullish edge as it resisted the half-line. Any close above equilibrium would likely result in a retest of the $20 mark.

While the DMI lines finally saw a bullish crossover, the ADX was in a steep downtrend. Therefore, the chances of keeping the 15-month (yellow) resistance intact were still high.


The next few days are critical to confirm a trend reversal. The alt would most likely test the upper trendline of the channel before testing the 20 SMA. Any close outside the channel would be a solid indication of the emerging trend.

Still, an overall analysis of market sentiment becomes essential to complement the technical factors in order to make a profitable move.

This post Could this be the start of a trend reversal for Chainlink?

was published first on https://ambcrypto.com/could-this-be-the-beginning-of-a-trend-reversal-for-chainlink/


Write A Comment