Chainlink (LINK) Giving Mixed Signals Despite Price Rebound


Chainlink (LINK) is trading above a crucial horizontal level. Whether it breaks down from here or continues to bounce back could determine the direction of the longer-term trend.

On December 4, LINK rebounded after hitting a low of $ 15. The rebound was crucial as it created a lower against price in July.

Furthermore, it validated the $19.20 area as support. 

This is a crucial area as LINK has been trading above since early 2021 except for the deviation (red circle) in July.

Therefore, a breakdown below this support could mean that it’s mired in a longer-term correction.

Current model

Shorter timelines offer mixed reading.

Technical indicators in the daily time frame are mostly bullish since both the MACD and RSI are increasing. The latter is above 50, which is often considered a sign of bullish trends, while the former is nearly positive.

Additionally, LINK broke out of a descending resistance line and recovered the horizontal $ 23 area thereafter.

The four-hour chart, on the other hand, shows that LINK has been trading inside an ascending parallel channel since its Dec 4 lows. This type of channel is normally considered a corrective pattern, meaning that an eventual breakdown from it would be expected. 

Currently, LINK is trading just above the midline of this channel (green circle). A drop below the midline would confirm that the trend is bearish and signify that a possible breakout is likely.

LINK wave count

Cryptocurrency trader @Altstreetbet tweeted a LINK chart, stating that it’s likely completed a corrective phase and will now target higher resistance levels.

The move since September 6 (highlighted) looks like a completed ABC corrective structure. This is especially likely due to the overlap between the current high and the September 21 lows (red line). If this is true, LINK could rise to the $ 40 level.

However, in order for this possibility to remain valid, LINK has to stay above its Dec 4 lows (white line) of $15. 

Due to bearish readings over shorter time frames, this possibility is now becoming less likely.


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