LINK price prediction is bullish for the short-term. However, LINK risks a massive drop if a crucial technical pattern plays out.
Chainlink is trading at $30.14 with a bullish bias on most crypto exchanges after rising approximately 3% over the last 24 hours. LINK price is up 8.85% over the last seven days and over 36% over the last one month. The oracle token has rallied 117% year-to-date.
Chainlink has rallied approximately 54% from a low of around $22.50 on October 12 to hit a high of about $34.70 on October 26. This rally has spelt out an ascending parallel channel chart pattern on the daily pattern which suggests that LINK price could rise to tag the September 06 range high above $36.4 as indicated in past analyses.
However, before reaching this target, Chainlink bulls must ensure that LINK closes the day above the immediate resistance at $32.10 embraced by the middle boundary of the prevailing chart pattern.
The sharp movement of the Relative Strength Index (RSI) towards the overbought region, and the position of the Moving Average Convergence Divergence (MACD) indictor above the zero line in the positive region add credence to this optimistic outlook.
LINK/USD Daily Chart
Investors should, however, be careful as the current rally of the LINK price could be a bull trap that could manifest after the asset tags the range high above $36. This may trigger the formation of double-top chart pattern, a significantly bearish chart pattern that could see Chainlink price drop massively towards the lower boundary of the rising channel around $20.50.
On the positive side, technical indicators on the daily chart show that LINK might not drop that much as it might find robust support around the $29.081 and $28.99 zones. Further down, Chainlink sits on strong support provided by the 200-, 50- and 100-day Simple Moving Averages (SMAs) at $27.39, $26.93, and $26.03 respectively.
Moreover, on-chain metrics from the In/Out of the Money Around Price (IOMAP) model by IntoTheBlock validate LINKs strong support as seen in the chart below. For example immediate support zone between $30.29 and $31.22 is where around 22.76 million LINK were previously bought by roughly 19,470 addresses.
Chainlink IOMAP Chart
Further down, LINK has robust support that at the moment, the only path with little resistance is upwards as shown on the IOMAP chart.
In a nutshell, LINK price may continue to rally but investors should be on the lookout whether the double-top pattern plays out or not.
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