ChainLink Breaks Out from Swing Low After Bitcoin Bounce - Price Analysis

  • Short term trend: overbought conditions, possible downtrend for next day
  • Long term trend: definitely in an uptrend, at least $2.80 target likely

It seems that the ChainLink (LINK) train stops for nothing, as the popular oracle-fueling altcoin takes another leg up. Notably, this altcoin has broken out with Bitcoin, with the latter having its own bounce off of local lows.

Starting with the 3-day LINK/USDT chart, we’ll notice that ChainLink found support at an area where volume peaks on the Volume Profile indicator, right side. This is where a long consolidation previously played out at about $2.40, during the summer.

Very enticingLINK chart by TradingView

We also notice on the Volume Profile indicator that, after $3.00, there is almost no resistance stopping this altcoin from getting back to its all time high. The local high is sitting at about $2.80, so LINK will have to punch through that level first.

Looking at the 12-hour LINK/USDT chart for a closer look, we see a clear breakout from a falling channel, after price double-bottomed in the support zone discussed above. The volume trend has been broken with force, and the histogram is arching up very sharply.

Clear breakoutLINK chart by TradingView

From this perspective, we can definitely expect at least 10% gains from LINK, until it engages with the resistance zone starting at $2.80. After that, we’ll have to re-assess for longevity above that mark.

1/1 sell targetLINK chart by TradingView

If we use the Fibonacci extension tool (above) from what is likely the latest swing low point, at $1.88, we get a 1/1 extension target of $3.26 -- about 25% up from here. If LINK does breach $3.00, we can expect selling there and a retracement or deeper correction.

In the very short term, on the 2-hour chart, we see that LINK is a bit overheated at time of writing and in fact going through a slight correction. Owing to the general uptrend, we can expect support to be found soon, with the golden ratio sitting at about 30k satoshis.

Bit of downsideLINK chart by TradingView

The RSI is just about getting overbought and correcting, but should have no trouble putting in a higher low; and the histogram is arching down at time of writing. Therefore, buying at this immediate time wouldn’t be the best idea for short term traders.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

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