Analyst Predicts ChainLink (LINK) Rally To $13 Could Result In 45% Price Correction, Here’s Why
08 Julho 2024 - 7:00PM
NEWSBTC
The decentralized oracle network ChainLink and its native token,
LINK, have staged a price recovery amid the broader cryptocurrency
market’s bounce from a recent significant correction. Despite
experiencing a 16% price retracement over the past month, LINK has
regained its stronghold, rising 5% to $13 in the past 24 hours
after hitting a six-month low of $11 on Friday. Still, cautionary
signals have emerged that caught the attention of crypto expert Ali
Martinez. Bearish Signals For ChainLink In a recent
social media post, Martinez raised concerns about a pattern visible
on LINK’s daily chart, suggesting the potential for a substantial
price correction ahead. Specifically, the analyst highlighted
a possible retest of the neckline of the head-and-shoulders pattern
during the recent upswing to $13. Related Reading: Mass
Adoption? NEAR Protocol Sees Over 12 Million Unique Addresses In 30
Days According to Martinez, this pattern indicates a continuation
of the downtrend until the right shoulder is broken, meaning that
the ChainLink price would have to break above the $20 level, the
top of the right shoulder, to invalidate this scenario. If this
scenario is as predicted, ChainLink could face a 45% correction.
Martinez previously highlighted the likelihood of such a correction
if LINK were to break below the $12.70 support level. The
token’s price might retrace significantly in this bearish scenario,
potentially reaching as low as $6.60. Notably, these levels were
last witnessed in September 2023, before the commencement of the
overall market uptrend that began in November of the same year. Key
Levels For LINK’s Price Recovery Another analyst, Crypto Ambrosio,
presents similar downward scenarios for the ChainLink price in a
recent analysis of key indicators. The analyst suggests that
if the 20-week exponential moving average (EMA), depicted by the
yellow line in the chart above, remains above the current price
action, it would serve as a notable bearish signal for the token.
However, breaking above this indicator situated at $14.75 would
invalidate this bearish outlook. Additionally, Crypto Ambrosio
noted a downtrend pattern in the Relative Strength Index (RSI),
further supporting the notion of a new downtrend for ChainLink. To
counter these bearish signals, it is crucial for LINK to hold the
$12 support level, as noted by the analyst. Ambrosio also
believes that if ChainLink forms a Falling Wedge pattern and breaks
the resistance at $15, it could signal a bullish reversal and pave
the way for further price recoveries toward its yearly high of
$22.89, reached in March. Related Reading: Bitcoin Starts July On A
Bearish Note, Will CPI Data Change The Narrative This Week? The
token must overcome key upper resistance levels while trading at
$13.28 to initiate a potential price recovery. Upon analyzing the
LINK/USD daily chart, the token will likely encounter its first
significant challenge at the $13.52 price level, which has acted as
a resistance for the past two months. Moreover, to invalidate the
extension of the bearish scenario and surpass the 20-week
exponential average, the ChainLink price would need to surpass and
consolidate above the $14.38 resistance level. Featured image
from DALL-E, chart from TradingView.com
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