Chainlink (LINK) Price Could Recover In Next Few Days, Here’s Why?
Chainlink (LINK) price has bounced up from the support line of a short-term parallel channel and formed a bullish pattern. A recovery phase could occur in the coming days.
Ascending parallel channel
Chainlink (LINK) price has been trading within an ascending parallel channel since December 2022. Both the support and resistance lines of the channel have been tested multiple times.
Yesterday, LINK price formed a bullish engulfing pattern after a retest of the channel’s support line. This is a bullish pattern that often leads to a subsequent uptrend.
Notably, whenever the price bounces up from the channel’s support line, it tends to move towards the channel’s resistance line and vice versa. Therefore, a similar move could occur at the present time.
If a rally occurs, the nearest resistance level can be found at the channel’s midline, which is $7.7.
Short-term outlook
The 4-hour chart shows that the price has broken above a short-term descending resistance line and is currently approaching a minor resistance level at $6.6.
Although it was rejected, a positive sign is that the bulls have not lost much ground in the past 24 hours.
The RSI indicator has formed a bullish divergence prior to the breakout and is currently above 50. Therefore, there is a possibility that LINK price will break above this resistance level and move towards the next resistance at $7.2.
Conclusion
The most probable outlook suggests that LINK price will recover in the next few days. The nearest target is found at $7.2, with further upside potential towards $7.7.
This perspective would be invalidated if the price breaks below the yesterday’s low at $6.23.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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