As a seasoned researcher with years of experience in the crypto market, I find myself intrigued by the current state of Chainlink (LINK). The price action over the past few days has been reminiscent of a rollercoaster ride, with the peak at Bitcoin Conference week being a brief moment of exhilaration before the subsequent plunge.
Despite hitting a high in March, the value of Chainlink (LINK) has continued to decrease, even with significant market events. During the Bitcoin Conference week, there was an initial 7% increase in LINK’s price, but it subsequently lost all those gains over the next three days.
In the past 24 hours, the value of LINK decreased by approximately 3.9%, now standing at $12.82. This potential drop could be linked to the data from yesterday’s FOMC meeting. The Fed choosing not to adjust interest rates might have triggered a broader market decline. For Chainlink to aim for $16, it seems like it needs some time to calm down first.
Chainlink Price Ready to Rally
The current price of the linked asset is following a downward trend within a ‘falling wedge’ structure, suggesting it might reverse direction and increase soon. At the moment, the price moves beneath both the 50-day (depicted in green) and 200-day (shown in black) exponential moving averages, indicating a bearish trend. Yet, this falling wedge is often interpreted as a bullish reversal pattern, which could mean an impending upward breakout.
As an analyst, I’ve identified key price levels for LINK that could significantly impact its movement. The first noteworthy support level lies at $11.4, marking the lower end of a falling wedge pattern. Additionally, this level aligns with a historically robust support zone beneath the overall market structure. Conversely, I’ve pinpointed significant resistance levels at $13.92 (50-day EMA), $14.78 (200-day EMA), and $16.00. The latter corresponds to the upper boundary of the falling wedge, serving as potential hurdles for further price increases.
On June 28th, a “death cross” signal, which typically predicts a bearish trend, appeared on Chainlink’s daily price chart. The recent candlestick pattern suggests that LINK might be going through a consolidation phase near the $11.4 support level. This could lead to a possible 11% drop in price before a potential bullish turnaround within this pattern occurs.
As an analyst, I’m observing that the Relative Strength Index (RSI) stands at 48.45, hinting at a somewhat neutral stance but subtly favoring a bearish trend. Yet, it’s close to the oversold region, which could signal an impending upward shift. Moreover, the Chaikin Money Flow (CMF) reads 0.07, signifying positive money flow and a gentle buying pressure in the market.
If Chainlink’s price drops beneath $10 and can’t rebound above that level, this could indicate market instability. In such a case, the LINK price might set a new lower low, suggesting a change in market trend and contradicting the optimistic view suggested by the falling wedge pattern. The potential support for Chainlink’s price might lie around $8.11.
Chainlink Whale Activity Supports Inbound Rally
Based on data from IntoTheBlock, it appears that large Chainlink token holders (whales) have consistently been adding more LINK to their accounts over the past two months. Notably, sharp increases in the amount of LINK held indicate instances where whales deposited significant amounts of LINK, while drops in holdings suggest days when whales moved their Chainlink tokens out. Analyzing these fluctuations reveals that the inflow (deposits) has been more substantial than the outflow (withdrawals), suggesting that these whales might be stockpiling for a possible price surge.
According to data from Coingecko, the trading volume has risen by approximately 4% and remains relatively steady, experiencing fluctuations during both positive and negative trends. A substantial surge in volume is necessary to substantiate a breakout from the falling wedge pattern. If the volume does not increase, the bullish argument for LINK could potentially weaken, leading to a possible downward shift.
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2024-08-01 12:00