ChainLink (LINK) is at it again, after having broken out from a clear resistance level on October 6, and is up 40% since then -- and up over 100% since finding its market bottom on September 15. This popular altcoin is now approaching the upper limits of its market structure, and we consider whether or not it may break this level and find new highs.
Looking first on the daily LINK/BTC chart, we see first of all how perfectly clean LINK’s movements are. We also notice that, while the size of LINK’s gains here are almost equal to the last big one, in June-July, trading volume on Binance is nowhere near what it was then. This is an interesting development, perhaps suggesting that ChainLink can break through that ceiling and reach new highs.
If we look at the same chart with indicators, we’ll see that the RSI is extremely overbought. This is not the time to be piling into LINK, as it will more than likely have to have some retracement at the resistance band -- even if it is to go on and break it.
However, on smaller timeframes (not picture), there are not really any signs of weakness yet. This is a major rally, and it wouldn’t be surprising to see it continue all the way to the previous all time high at 40k sats.
All in all, we have a major breakout of a major altcoin. And with Bitcoin dominance falling from clearly seem like overbought conditions, we may see some other major altcoins follow suit. As for LINK, although the current rally could continue to 40k sats, this is a dangerous time to be buying into it -- but having said that, it could be just the first leg of an even larger LINK rally to new highs.
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