Technical Analysis: Bullish Trend for Chainlink (LINK)
The recent trading sessions for Chainlink (LINK) have been revealing an impressive bull trend. After witnessing a strong rebound from the support level of $5, the LINK has been maintaining an upward trajectory. This positive cost increase has greatly influenced the market.
Overarching LINK Performance
The past week has seen LINK’s values surge up to 12% and more. Despite a slowdown in gains observed on the daily chart, the coin’s performance overall remains promising. In fact, the formation of a bullish reversal pattern played a fundamental role in driving this substantial price surge. This price movement pattern for LINK signifies bullish strength in the technical outlook, despite a slight decline in the accumulation on the chart and demands.
- Chainlink (LINK)’s Recent trading sessions formed a pattern that suggests potential reversal in price direction.
- With a slight decrease in market capitalization, a decline in buying strength is suggested.
- To prevent this price reversal, LINK needs to maintain its upward trajectory and surpass all immediate resistance levels.
Chainlink’s Price Analysis on the One-Day Chart
The current trading price of Chainlink (LINK) stands at $6.90. After the coin reversed the bearish turn at the $5 level, it has demonstrated significant bullish strength, attributed to the formation of an inverted head and shoulders pattern over the last week.
Despite this upward surge, LINK may face resistance around the value of $7.30 considering its historical performance. This mark has persistently acted as a strong ceiling for the coin’s price. Further backing this resistance is the double-top pattern formation (marked in red in the image), primarily considered as a bearish signal. Therefore, LINK might witness a drop towards the local support level of $6.60 and even as far down as $5.80 before embarking on a recovery again.
Detailed Technical Analysis for LINK
During the double-top pattern formation, the buying strength notably declined, suggesting a possible bearish price movement on the horizon. The bearish divergence observed in the Relative Strength Index (RSI) further supports this potential decrease in demand.
The weakening buying strength is also reflected in the RSI, even though it remained above the half-line. Despite these potential challenges, LINK has managed to stay above the 20-Simple Moving Average (SMA) line, indicating that the buyer’s grasp over the price momentum is still dominant. However, anything that results in a drop from the current price level could lead to LINK falling below the 20-SMA (red), bringing sellers back into the market.
The Moving Average Convergence Divergence (MACD) indicator, which is used to signal price momentum and trend reversals, has shifted into a phase of declining green histograms. This signifies a potential decrease in buy signals. Additionally, the Bollinger Bands, which indicate volatility, have widened, suggesting possibilities for a significant price fluctuation in the upcoming trading sessions.