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Chainlink (LINK) Price Bullish or Bearish? This Key Trading Indicator Provides Insight

2 mins
Updated by Ryan James
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In Brief

  • The Chainlink (LINK) price has seen significant volatility since April, with drops of 46% and 33%, and increases of 77% and 46%, respectively.
  • The daily RSI has effectively predicted the trend's direction since April. Its reaction to the 50 trendline will be crucial for the October trend.
  • A price breakout from the descending resistance trendline will mean the trend is bullish. A RSI close below 50 will mean the trend is bearish.
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Since April, the Chainlink (LINK) price has fallen under a descending resistance trendline.

During this time, the Relative Strength Index movement has been especially prescient in determining the Chainlink price volatility.

Will Chainlink Reach New Yearly High?

The daily timeframe technical analysis shows that the LINK price has experienced significant volatility since April.

During this time, it has seen drops of 46% and 33% (red) and increases of 77% and 46%, respectively.

LINK has also fallen under a descending resistance trendline throughout this period. The trendline caused two rejections on July 20 and September 30, respectively (red icons).

The first rejection catalyzed a 33% decrease, while the second one only led to a slight retracement.

Chainlink Price Prediction
LINK/USDT Daily Chart. Source: TradingView

After falling to a low of $7.20, LINK created a bullish, engulfing candlestick with a long lower wick (green icon). This type of candlestick negates all of the losses from the previous period.

The long lower wick shows buyers stepped in quickly, ending the previous decrease.

In the news, Chainlink co-founder Sergey Nazarov stated that banks are disadvantaged regarding blockchain adoption.

The reason for this is that they already have a substantial investment in the SWIFT infrastructure, which complicates the blockchain adoption process.

The daily time frame RSI can be used to determine the future trend. The RSI is a popular metric among traders for gauging momentum and informing their buy or sell decisions on assets.

Bulls have an advantage if the RSI reading is above 50 and the trend is upward. The opposite is true if the reading is below 50.

The indicator shows that the 46% and 33% Chainlink price decreases occurred after the daily RSI reached overbought territory (red circle).

With this in mind, the RSI also reached overbought territory on September 30. This coincided with the rejection of the resistance trendline (red icon). So far, it has led to an 8% drop.

An interesting signal comes from the RSI’s relationship to the 50 trendline. In both previous decreases, the downward movement was confirmed only after the RSI broke down below 50 (green circle). This has not occurred yet in the current decrease.

It is also worth mentioning that the Chainlink exchange supply hit a 15-month low on October 3. Historically, shortages like these have driven price increases.

LINK Price Prediction
LINK/USDT Daily Chart. Source: TradingView

So, the future LINK price prediction can be determined by whether the RSI breaks down below 50 or bounces. A breakdown could lead to a 23% drop to $6.35.

If the RSI bounces, the altcoin will likely break out from the long-term descending resistance trendline. In that case, a 25% increase to the next resistance at $2.45 will be likely.

For BeInCrypto’s latest crypto market analysis, click here.

Top crypto platforms in the US | February 2024

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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