Analysis

Chainlink (LINK) Rallies 20%, But Here’s Why It Could Reverse Gains

Chainlink (LINK) recovered sharply from the $ 7.35 support zone against the US Dollar. The recent rally is now facing a strong resistance near the $ 10.00 zone and the 100 SMA (H4).

  • Chainlink token price started a strong upward move from the $ 7.32 low against the US dollar.
  • The price is now facing hurdles near the $ 10.00 resistance and the 100 simple moving average (4-hours).
  • There was a break above a crucial bearish trend line with resistance near $ 9.00 on the 4-hours chart of the LINK/USD pair (data source from Kraken).
  • The pair is likely to reverse gains if there is no upside break above $ 10.00 and $ 10.50.

Chainlink (LINK) is Recovering

In the past few days, there was a steady decline in chainlink (LINK) below the $ 10.00 support zone against the US Dollar. The price even broke the $ 8.50 support level and settled well below the 100 simple moving average (4-hours).

Today, bitcoin and Ethereum started a steady recovery above $ 10,550 and $ 340 respectively. LINK price also recovered sharply from the $ 7.32 low and it climbed nicely above the $ 8.50 and $ 9.00 resistance levels.

There was also a break above a crucial bearish trend line with resistance near $ 9.00 on the 4-hours chart of the LINK/USD pair. The pair broke the 23.6% Fib retracement level of the downward move from the $ 13.31 high to $ 7.32 low.

Chainlink (LINK)

LINK price rallies to $ 10.00. Source: TradingView.com

However, the price is now facing a couple of important hurdles near $ 10.00. The 50% Fib retracement level of the downward move from the $ 13.31 high to $ 7.32 low seems to be acting as a strong resistance.

The previous support near $ 10.50 and $ 11.00 are now likely to act as a major resistance along with the 100 simple moving average (4-hours). A successful daily close above the $ 10.00 resistance and a follow up move above $ 11.00 is must for upside continuation in the near term.

Reversal From $ 10?

If chainlink’s price fails to clear the $ 10.00 resistance and stays below the 100 simple moving average (4-hours), there is a risk of a fresh decline in the near term.

An initial support on the downside is near the $ 9.00 level. The main support is near the $ 8.50 level, below which the bears are likely to aim a new monthly low below the $ 7.300 level in the coming days.

Technical Indicators

4-hours MACD – The MACD for LINK/USD is now gaining pace in the bullish zone.

4-hours RSI (Relative Strength Index) – The RSI for LINK/USD spiked above the 50 level.

Major Support Levels – $ 9.00, $ 8.80 and $ 8.50.

Major Resistance Levels – $ 10.00, $ 10.50 and $ 11.00.

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Analysis – NewsBTC

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