Can Chainlink break out past the near-term supply area at $18
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
A longer-term outlook for Chainlink remained bearish – the $19.67 and $22-levels remain unbroken. On lower timeframes, a recovery back towards these levels appeared possible. Bitcoin registered some gains in recent days. Moreover, Bitcoin’s Dominance fell from 43.05% to 42.26% at the time of writing, which suggested that altcoins were making gains alongside Bitcoin.
Chainlink broke the $16.6 highs that had acted as strong resistance to the price over the past couple of weeks. Was it a short-term uptrend gathering strength?
Source: LINK/USDT on TradingView
The $16.6-level marked the highs of a bounce from the $13.56-lows. A set of Fibonacci retracement lines were plotted based on the highs before the market-wide sell-off (but still a lower high in a longer-term downtrend) at $22.98, and the swing low at $13.56. This showed that the $15.78 and $17.16 were levels of short-term importance. Over the past few days, the price has climbed above the 23.6% retracement level and has also retested $16.6 in search of buyers.
This showed that, in the short term, the market structure was bullish. The $18 higher high (red box) area was a place where supply was found. At the time of writing, the price made consistent higher lowers (white trendline), which showed buyers were ready to buy even as the price approached a resistance zone.
A breakout past the $18-area and a retest would be a buying opportunity. The $17.4-level has held significance in the past, and flipping this level to support would bolster LINK’s chances of a move upwards to $19.6.
Source: LINK/USDT on TradingView
The 21-period moving average
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