Chainlink: Measuring the potential of this ‘bullish pattern’
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
Since hitting its January highs, Chainlink (LINK) bears have made a point to mark lower peaks while testing its 14-month $11.7-support. The most recent fall marked a falling wedge on LINK’s 4-hour chart.
After forming a morning star bullish candlestick pattern, the chances of a close above its long-term Point of control (POC, red) have heightened. In such a case, a recovery towards its trendline resistance (white, dashed) would be probable.
At press time, LINK was trading at $13.28.
The most recent sell-off (from 11 January) led the alt to lose more than 60% of its value, plunging it towards its 13-month low on 24 February. As the $11.7-level support has historically (for over a year) served as a strong buying zone, LINK reversed to form an inverse head and shoulder.
But this recovery was shunned by its trendline resistance while LINK kept entering a tight phase. Over the last few days, the down-channel (white) reversed into a falling wedge (yellow). Furthermore, the alt saw a morning star (bullish) candlestick pattern.
From here on, any close above the wedge or the POC would position LINK for a test of its trendline resistance. If the buyers can gather enough thrust (on high volumes), the chances of a further recovery before a pullback would exist. But if the bears are adamant about protecting this liquidity range, then the alt would continue its tight phase between the wedge before a probable breakout.
Source: TradingView, LINK/USDT
The RSI and the price action were in harmony for the most part. Thanks to recent bullish pressure, the RSI managed to poke above the midline and affirmed a
Read more on ambcrypto.com
