Chainlink (LINK) Price Shows Long-Term Range Breakout, Up 130% to $18
The price of Chainlink (LINK) has generated a strong bullish signal on the monthly timeframe. There is a possibility of a significant breakout in October, followed by a strong rally.
Monthly Outlook
The Chainlink price has been trading within the range of $5.5 to $9.5 since May 2022. This range has been tested multiple times, confirming the validity of the range .
In June 2023, LINK experienced a false breakdown below the range, forming a bullish Pinbar candle (green arrow). This indicated strong buying interest at lower levels.
The following month’s bullish candle created a morning star pattern. This is a bullish pattern, often appearing at the end of a downtrend. This pattern’s significance is heightened when it appears on the monthly timeframe.
Indeed, September 2023’s bullish engulfing candle confirms this. This candle shows that the bulls have complete control over the price action and that a breakout above the long-term range will occur soon.
The monthly RSI (Relative Strength Index) supports the continuation of the uptrend as it breaks above its ascending parallel channel. Such RSI breakouts often precede similar price breakouts, reinforcing the bullish thesis.
As this range has persisted for over 500 days, a breakout above it could be followed by a very strong upward movement. In this scenario, the LINK price could rise towards the next resistance zone at $17-$18, representing a potential 130% increase from the current price level.
Short-term Correction
The LINK price has rapidly ascended along the ascending support since September 11. This led the price to the resistance at $8.4 on September 30, where bears actively defended their position.
Indeed, the price faced rejection and has been correcting since. Currently, the ascending support line is coinciding with the 0.5-0.618 ($6.7-$7) Fib retracement support zone of the recent rally. Bulls are likely to step in strongly at this level.
The RSI has entered oversold territory but has not exhibited any bearish divergence, indicating this is a correction within the overall uptrend. Moreover, the RSI’s bullish divergence remains intact, further strengthening the case for the bulls.
Therefore, LINK’s maximum retracement is expected to be found in the $6.7-$7 range. Subsequently, bulls are likely to make another breakout attempt.
Conclusion
Technical signals show that the LINK price is very close to a historic breakout. This could trigger a 130% increase towards the next resistance zone at $17-$18.
However, there is still a possibility of a decline to the $6.7-$7 range before this occurs.
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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