- The LINK is trading between the support of $9.80 and the resistance of $13.
- Long-term technical indicators are bullish, but short-term indicators are bearish.
- The price may have completed wave A of an A-B-C correction.
The price of ChainLink (LINK) has exceeded a downward trend line that has been in place for more than two months.
Despite this, the price has not risen significantly as a result of its advance, and has yet to pass a crucial resistance zone. This could be a clear sign that the trend is bullish.
ChainLink trading range
The LINK price had been declining along a downward resistance line since August 17, after peaking at $20.71. The price of LINK had been declining along a downward resistance line since August 17. The decline continued to a low of $7.28 on September 23. Since then, the price has been rising.
On October 9, the LINK managed to break the downward resistance line. After a retracement that validated the $9.80 zone as a support, the price resumed its upward movement. The closest resistance zone is at $13. Until the price passes this zone, it is likely that the current move is a correction in response to the previous decline, rather than the start of a new upward movement.
Technical indicators for daily data are bullish. The MACD is up and has moved into positive territory. The RSI has rebounded above the 50 line, and the Stochastic Oscillator is also up after forming a bullish cross. In addition, the October 23rd closing is the highest since September 6th.
These are all signs that the price will likely continue to climb toward and possibly exceed the $13 resistance level.
Despite the bullish aspect of the daily time scale, the shorter-term data has begun to show weakness. Both the RSI and the Bitcoin Supersplit have generated considerable bearish divergences over the past few peaks.
Thus, the price could decline in the short term towards the $11 minor support zone before trying to move past the $13 zone. The second minor support zone coincides with the longer term support at $9.80, making it all the more notable.
A possible diagonal?
Crypt trader @TheTradingHubb highlighted a LINK chart showing a possible dominant diagonal, after which one would expect a decline. This would be consistent with the short-term weaknesses observed through the divergences.
The movement that started with the trough on 23 September does indeed look like a dominant diagonal (in blue below), and could be part of a longer term A-wave (in black).
This dominant diagonal has also created an upward bevel, which is considered to be a bearish reversal pattern. If the price passes below this wedge, its maximum retracement level would be at the 0.618 fibonacci level at $9.245.
The reason why the dominant diagonal would likely be more of an A wave rather than the start of a momentum is the previous movement. The latter shows a full bullish momentum.
Thus, it is more plausible that the current rise is corrective. That said, the entire movement could push the price up to the 0.618 fibonacci level of the entire decline to $15.21. The price should then fall to new lows.
In conclusion, following a short term decline, the LINK price is expected to rise gradually towards the $15 level.