Technical Analysis: Chainlink (LINK) can bounce strongly when it reaches this level
Chainlink (LINK) is showing signs of short-term weakness, but the long-term upward trend remains intact. Chainlink was created to become a blockchain platform that connects with real-world applications and data through APIs.
Trading range
Since May 2022, Chainlink (LINK) has traded within a range of $5.5 to $9.5. The price has tested both the support and resistance of the range multiple times.
After bouncing from the range support in early January, LINK surged above the 20-week MA-EMA cluster and confirmed it as support last week. This is a sign that the bulls are still actively buying in the drops.
In addition, the weekly RSI indicator has generated a significant bullish divergence (blue line) before the entire upward move, and the divergence line is still intact. Therefore, the most likely prospect suggests that LINK will continue to rise to $9.5.
Ascending support line
LINK has also moved along a ascending support line since early January. The price has bounced from the support line several times, most recently on February 13. This bounce has helped the price to create a higher high, indicating that the upward momentum is still strong.
Therefore, the price is likely to bounce again when it touches this line. In addition, this line also coincides with the horizontal support area of $7, further increasing its significance.
The RSI indicator creates a bearish divergence and falls below 50, indicating that the downward momentum is still present.
Therefore, the price is likely to continue to decline to the support line before starting another rally.
Overall, LINK’s long-term bullish outlook remains intact. However, with short-term momentum weakening, LINK may drop to $7 before starting a recovery.
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