Chainlink (LINK) more fear than harm Analysis of July 25, 2023

After a worrying technical breakout, Chainlink price performed +60%. What prospects are ahead for the reference blockchain oracle?

LINK status

We mentioned in the LINK analysis of June 22, 2023, two scenarios, one of which is bullish. A month later, the latter was born. Indeed, after having made a new Low, the price of the LINK has clearly performed. It recently reached the top of its range near $8. This level has recently been rejected. Now, Chainlink is trading around $7.5.

Chart of LINK/USD in daily time frame
Chart of LINK/USD in daily time frame

The breakout of the bearish trendline drawn from Chainlink’s ATH is now done. Although the last weekly close is encouraging for a possible bullish continuation, watch out for the resistance at $8. The latter has obviously been rejected many times. From a chartist point of view, we can see a succession of bottoms. The volumes recently observed show us a certain enthusiasm for the cryptocurrency. These statements can be confirmed byopen-interest of the LINK which has not been this high since January 2022. The price of the LINK is now above the daily moving averages 50 and 200. The latter are crossed downwards, but now trending upwards. Finally, when we look at the RSI or MACD type oscillators, we can interpret that the momentum of the LINK is rather bullish.

Chart of LINK/USD in weekly and daily time frame
Chart of LINK/USD in weekly and daily time frame

For a bullish scenario, it would be necessary to consider going beyond the $8 zone before imagining reaching the psychological threshold of $10. If this resistance is broken upwards then we could have an even more distant horizon, starting with $11-12.

For a bearish scenario, it would be necessary to consider a return below the $7 zone to imagine returning to the bottom of the range around $6 or even $5.5. If this support does not hold, then we could anticipate a bearish continuation until the next support of $5.

Chart of LINK/USD in daily time frame
Chart of LINK/USD in daily time frame

Conclusion

Chainlink’s latest fluctuations are encouraging for the future of its price. However, despite the many positive factors of the cryptocurrency, we will still have to wait for confirmations to have clearer and broader projections. Thus, it will be important to carefully observe the reaction of the price on the different identifiable levels to confirm or not the different hypotheses made. Beware of potential “fake outs” and “market squeezes” in each situation. In addition, it should be remembered that these scenarios are based solely on technical analysis. The price of cryptocurrencies can change more or less quickly, depending on other more fundamental factors.

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