Chainlink Safe-Haven From Bitcoin Drops, Testing All-Time-Highs - Price Analysis

  • Short term trend: May need some time to cool off
  • Long term trend: Strong uptrend obtains

ChainLink (LINK), one of the most popular altcoins for nearly two years running, has put another leg up in its uptrend which has lasted virtually all of 2019. What’s more, during this last month of Bitcoin (BTC) downside, it has proven itself to be inversely correlated to Bitcoin’s price action: When BTC goes down, LINK goes up.

To illustrate this trend, we look at a pair of recent 2-day charts highlight each coin’s performance last month. The highlighted pink bands cover equivalent periods for each chart.

Inverse correlationLINK chart by TradingView

We can see that when Bitcoin was within periods of its major downside legs, LINK’s price rose against BTC, indicating that many ran to LINK as a safe haven fleeing Bitcoin downside.

Accordingly, LINK/BTC has seen gains in the last few days as Bitcoin again slides lower. The altcoin has run into the resistance located at its all-time-high on its Bitcoin pairing. On the 3-day LINK/BTC chart, we see LINK poking into this range for the second time in a month.

Overbought at ATHLINK chart by TradingView

ChainLink’s clear uptrend may not be over, although the RSI is again in overbought territory. The EMAs are fully fanned out and begging for a correction. The histogram bars on this chart are running flat, which equates to an arch down from the minimum three-bar count (three bars needed at least to discern a vague direction of momentum). Here we see a very strong uptrend, but signs of exhaustion.

And going to the daily, we see the overheated signs all over. The price action has taken the pattern of a rising wedge, often telegraphing a breakdown. Buy volume has been strong on this last push, but not as strong as during the previous push suggesting a flagging buy support.

Likely correction needed hereLINK chart by TradingView

We see clear bear divergences on both RSI and histogram, and the histogram is more clearly arching down here.

How does all this translate to the USD(T) chart? Not quite all-time-highs (in fact, about half that), but LINK has been doing great here, too. On this 12-hour chart, trading has bounced above and below the grey inflection zone, looking to be consolidating generally in a triangle pattern. Price has been responding to the 45 EMA, and we see that level defended a few days ago with a monster buy wick.

But USD charting still humming?LINK chart by TradingView

Volume is pretty even here, and price is crowding the top of the trading range. We see what looks like pressure on an RSI downtrend, and it would be no surprise to see this break. Overall, the USDT pairing looks stronger than the BTC pairing in the shorter term, and another successful test of the uptrending 45 EMA could see another breakout.

It seems that LINK, although still within a strong uptrend, looks a little tired on its BTC pairing. However, the USD pairing is looking good still and could easily break out again. LINK is one of the very few altcoins that seems to be serving as a safe-haven from Bitcoin itself, and that is not something to be taken lightly.

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

Featured Image Credit: Photo via Pixabay.com