Chainlink Price Analysis: LINK/BTC Breaks out From a Descending Wedge

After reaching highs of 29,000 satoshis on July 14, LINK began to decrease. How long will this decrease continue? Keep reading below in order to find out. For our previous analysis click here.

Chainlink Price: Trends and Highlights for July 16

• LINK/BTC broke out from a descending wedge
• It is following an ascending support line both in the long- and short-term.
• Daily moving averages have made a bearish cross.
• There is significant support at 23,000 satoshis.

Previous LINK Price Movement

Since reaching a high on July 2, LINK has been decreasing — trading inside a descending wedge. On July 2, the Chainlink price broke out from the wedge. The breakout transpired with average volume, reducing its validity. Afterward, it reached the resistance area at 29,000 satoshis before beginning to decrease.

Ascending Support

Since reaching a low on July 10, the LINK price has been following an ascending support line. The LINK price touched the support line for the third time on July 15. Similarly, it is also following a support line in a longer time-frame and has been doing so since May 13. Additionally, we can see that the short-term support line coincides with a significant support area at 23,000 satoshis. Once the Chainlink price reached this area on July 9, it began an upward move. However, a look at the moving averages (MA) gives a bearish outlook. On July 14, the 10- and 20-day MAs made a bearish cross. The LINK price has been trading below both of them since. This was preceded by a bearish cross in the MACD on July 8. This makes us believe that the short-term ascending support line will be successful in supporting the Chainlink price. Instead, LINK is likely to again drop to the support area at 23,000 satoshis before deciding on its next move.

Candlestick Analysis

A closer look at the daily candlesticks gives us a clearer trading range. Candlesticks that have reached values above 28,000 have been characterized by long upper wicks. The same is true for the lower wicks of candlesticks with values below 24,500 satoshis. Therefore, we have a trading range between 24,500 and 28,000 satoshis. The 24,500 level is especially important. The LINK price has not closed below it since June. Therefore, a daily close below 24,500 could trigger a rapid price decrease towards the long-term ascending support line which is currently at 18,000 satoshis.

Summary

LINK recently broke out from an ascending wedge. It is following an ascending support line. An analysis of moving averages makes us believe that the price will drop to the support line outlined above before deciding on its next move. Do you think LINK will reach the support area outlined above? Let us know in the comments below. 

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Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.  Images are courtesy of Shutterstock, TradingView.