Although recent rallies have helped Chainlink (LINK) stay strong in the game, the bearish trend on the daily chart remains uncertain. However, a significant move will create a bullish breakout for LINK and help form new highs.
Chainlink (LINK) At the time of writing, it was trading at $17.2, up 2% in the last 24 hours.
Chainlink (LINK) Daily Chart
chainlink pricewas in the middle of a downtrend due to a broken up channel in the second week of February. Yesterday’s 9% gain gave some respite to bullish traders, and there was plausible evidence to suggest that LINK will stay in shape throughout the week.
The reason for this bullish forecast is that low selling volumes preceded LINK’s up-channel collapse. A closer look at the volume oscillator showed that the index was falling as the breakout took effect. It offers a great insight into trading volumes, breaks or cuts. Normally, if good volumes follow the move, the price continues to trend towards a breakout. However, a move in lower volumes creates “false breaks”, increasing the chances of a directional price change.
If this happens, a retracement in the channel will likely be completed with LINK forming a new high at the 78.6% Fibonacci level ($21).
A daily close above the 20-SMA (red) could help confirm the outlook as the momentum slides behind the buyers, but a resistance near $19 is also highly likely. The forecast was supported by the daily RSI, which created higher lows in its first attempt to cross 55 since Jan. The same was further strengthened by a favorable MACD after the bearish trend was avoided.
On the other hand, Chainlink’s bearish bias will return if the price action is rejected at the daily 20-SMA (red). The resulting move will cause LINK to bounce back to an earlier demand zone of $14.3-13.4 after a 17-22% correction.
Daily 20-SMA (red), chainlinkIt would not be wrong to say that it is the key point of the bullish outlook. A successful close above the short-term MA could be completed with a new high near $21. However, traders should play their moves carefully if the price fails to rise above $17.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.