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On August 3, 2019, the Chainlink price reached a high of 25,271 satoshis. A downward move followed. On August 10, the LINK price reached a low of 18,050 satoshis. It has been increasing since then.
Was this the beginning of a new upward move for LINK? Continue scrolling if you are interested in finding out.
For our previous analysis, click here.
As stated in the introduction, LINK began an upward move on August 10.
Using a Fibonacci retracement tool, we can see that it met resistance once it reached the 0.5 fib level, created a double top, and has begun to reverse.
The double top is considered a bearish reversal pattern. However, it was not accompanied by bearish divergence, somewhat reducing its significance.
To the contrary, during the decrease from the double top, the RSI has been generating bullish divergence.
This divergence, however, is only present in the hourly or shorter time-frames.
Let’s take a look at the long-term to see if an upward move is likely to begin.
A look at the daily chart shows that the LINK price has been trading inside a descending channel since July 8.
On August 9, it reached the support line and began an upward move.
The support line also coincides with the upper limit of a significant support area, found between 16,500-18,000 satoshis.
A closer look at daily candlesticks shows that LINK has been displaying signs of indecision
While it made a bullish engulfing candlestick on August 9, it followed it with two doji candles (a small body with long wicks). This is often a sign of indecision.
A bearish candlestick could initiate a reversal towards the support area.
The current candlestick is shaping up to be bearish. However, due to our short-term analysis, that seems unlikely.
A look at moving averages (MA) also gives us a neutral sentiment:
The Chainlink price is trading between the 10- and 20-day MAs.
It has made two unsuccessful attempts at breaking out above the 20-day MA.
It is worth mentioning that the LINK price has not reached a daily close above it for more than a month.
To conclude, while LINK has made several attempts at initiating upward moves, they have either been unsuccessful or devoid of significant strength.
Therefore, since LINK has not shown any clear signs of a reversal, we are assuming that the current upward move will be similar. It is likely to decrease towards the support area, possibly make a double bottom and initiate another upward move.
We do not believe a breakdown below 17,000 satoshis is likely.
The LINK price is trading inside a descending channel.
According to our analysis, it is likely to decrease towards the support area outlined above.
Before that, a short-term increase toward the resistance line of the channel is possible.
Do you think LINK will initiate an upward move? Let us know in the comments below.
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.
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