Quick grip:
- ChainLink is currently printing a rising wedge pattern in the shorter time frames
- A resolution of this wedge could result in LINK falling in the $ 12 support area
- If $ 12 fails, ChainLink may very well be on its way to retesting the $ 10 test
- However, from the daily chart, LINK still shows a notable uptrend with a retest of the $ 14 to $ 15 price area still possible
ChainLink is once again above $ 13 with a move that could open LINK in the $ 14 to $ 15 price area. However, the upward path for ChainLink may not be clear as will be explained below.
From the hourly chart, it can be seen that ChainLink is printing a growing wedge pattern. Rising wedges are usually a sign of low buying and could foreshadow ChainLink’s value once again falling into the crucial support zone at $ 12, as illustrated in the chart below courtesy of Tradingview.
From the chart above, it can also be seen that ChainLink’s trading volume has been down since November 7th. Such a drop in trading volume is also an indicator that LINK could be set for a new $ 12 test.
The Daily LINK / USDT chart still indicates an uptrend
However, LINK’s drop to $ 12 could be a temporary drop as the daily chart provides some clues that $ 14 to $ 15 could be a possibility for ChainLink in the near future.
A quick analysis of the LINK / USDT daily chart above reveals the following.
- The volume of trade is in the green with the gradual reduction of purchases
- The daily MACD crossed bullishly slightly above the baseline
- The daily MFI is at 58 which is in neutral territory
- The daily RSI is at 68 and has yet to reach the overbought territory
- The price of Chainlink at around $ 13 is mainly the three moving averages: 50 days, 100 days and 200 days
- If the $ 12 support area fails, LINK could find substantial support at $ 11.70, $ 11.20, $ 10.90, $ 10.50 and $ 10
Conclusion
In summary, ChainLink’s (LINK) digital asset printed a rising wedge pattern on the hourly chart. This could foreshadow a brief drop in LINK to the $ 12 price level. The LINK / USDT daily chart provides some clues that the drop to $ 12 might be temporary and could be a good area for a bounce into the $ 14 price range. for $ 15.
However, if the $ 12 support zone fails, ChainLink could very well be on its way to another crucial support area at $ 10.
As with all ChainLink analysis, traders and investors are advised to keep an eye out for any sudden movements of Bitcoin in either direction, which could affect LINK. We also recommend the use of adequate stop losses and low leverage when trading LINK on various derivative platforms.
