Chainlink price could be approaching a new uptrend, but it needs to hold above $20
Chainlink price appears to be trading at a key support level that previously marked the start of a bull run. The same price action can push LINK as high as $200. Although at the moment, LINK is changing hands at $25 and $200 sounds far-fetched, but we can hope.
LINK/USD 4-hour chart | Source: TradingView
Chainlink price looks ready to start a new bull rally
Chainlink looks ready to run after it suffered a sharp correction since its rally to $36.40 on September 6. LINK has dropped nearly 30% in value since now trading translates to around $25. Still down 50% from the all-time high of $52.7.
The downtrend of the past two weeks could have been foreseen as LINK was rejected by the middle trendline of an ascending parallel channel where its price has been holding since May 2018 on the weekly chart.
Every time LINK has risen to the upper boundary of this technical formation since then, the uptrend has reached exhaustion, and the price has retreated to the lower edge of the pattern. From this point, LINK tends to rise again, which is consistent with the characteristics of the parallel channel.
At the moment, LINK seems to have found support around the channel’s lower trendline, and it looks like a bullish impulse could be in the works. Chainlink could soon rise towards the mid or upper trendline of the channel. These resistance areas are at $70 and $200, respectively.
LINK/USD 1-week | Source: TradingView
The buying behavior of whales on LINK supports the bullish outlook. According to Santiment, the buying pressure behind Chainlink has increased significantly over the past few months, with addresses holding between 1 million and 10 million LINK now holding 167.7 million LINK.
“Chainlink sits at a modest $25.70, but whale traders are staying busy & adding to their bags. Addresses with 1M to 10M LINK now own 167.7M tokens worth $431M. In the last four months, through this volatility, these whales have added 15.2% more LINK”, Santiemnt stated.
This significant support area has contained every wave of bearish pressure since May 2018. A breach of such a firm footing could incite panic selling among investors, leading to significant damage. The lower boundary of the channel is at $20 at press time. Any signs of weakness at this point could lead to a correction towards $13 or even $8.
- Large Chainlink Whales Have Purchased 3.4% Of The Total LINK Supply On The Dip
- Top Analyst Predicts Chainlink Is On Its Way To The Moon – Here’s Why