Last Friday, Chainlink (LINK) experienced a significant 13% correction that resulted in the cryptocurrency breaking key support levels, causing concern among analysts and investors. As Bitcoin grapples with prices below $70,000, market observers are keenly watching LINK’s technical indicators to understand the next potential moves.
What Are Technical Indicators Suggesting?
LINK’s price has entered a downtrend, breaking significant support at $17.40, which corresponds to the 100 EMA on the 4-hour chart. The volume profile currently peaks at $16.70. Despite entering the bullish zone at the 200 EMA on the 4-hour chart, the $16.70 and $18.00 levels pose strong resistance. Experts point to $15.60 and $14.30 as crucial support levels during this downward trajectory.
According to technical analysis, these support levels align with the Ichimoku Cloud’s significant flat lines on the 4-hour timeframe, indicating potential support zones. On a daily scale, the entry into the Ichimoku Cloud might signal a bearish trend, further supported by a relative strength index (RSI) drop from 70 to 43.
Where Does LINK Stand Now?
LINK’s current positioning finds strong support at the 200-day exponential moving average (EMA). Should the price touch the lower boundary of the Ichimoku Cloud on the daily timeframe, approximately at $14.30, it would indicate a critical support point. Breaching this level and falling past the $15.60 support could herald a very bearish trend for the cryptocurrency.
Concrete Inferences for Users
Key Takeaways:
- A break below $14.30 could signify a continued downtrend.
- Resistance levels of $16.30-$16.50 are crucial for a potential bullish reversal.
- The RSI dropping to 43 indicates weakening buying momentum.
- Monitoring the 200 EMA on the daily chart is essential for predicting price movements.
If LINK surpasses the $16.30-$16.50 range, it could signal an optimistic technical outlook, possibly pushing the cryptocurrency above the Ichimoku Cloud, indicating a medium-term bullish trend.
In conclusion, Chainlink is at a pivotal point with critical support and resistance levels that could dictate its short-to-medium-term price movements. Investors should closely monitor these technical indicators to gauge further market direction.