Chainlink Price Analysis: Rising RSI Bolster LINK Price for Pattern Fakeout

The prolonged retest phase of the falling wedge pattern indicates a lack of commitment from sellers to continue the prevailing downtrend. The buyers may take advantage of this consolidation to trigger a false pattern breakout. Thus, the expected breakout from the overhead trendline and $8 may open a recovery opportunity for Chainlink(LINK) price.

Key points:

• The RSI slope shows an evident bullish divergence in the daily time frame
• The LINK price tease breakout from 20-day EMA
• The intraday trading volume in the LINK token is $413 Million, indicating a 54% gain.

Source- tradingview

The year 2022 seems to be highly bearish for LINK/USDT pair as the market value fell drastically over the months. The downfall created a lower high formation learning to the resistance trendline of the bearish wedge pattern. 

The increased selling experienced all over the crypto market led to a high-momentum bear cycle within the pattern resulting in the support trendline breakout. However, the breakout rally struggles a follow-through below $6.32, resulting in LINK price to follow a sideways shift that retests the broken trendline. 

The lack of bearish follow-through and the extended consolidation teases a recovery rally ready to undermine the fallout. Hence, a relief rally drive the LINK price to the resistance trendline close to the $12 mark.

If the post-retest rally leads to the bearish breakout of the consolidation range, LINK traders can find the $6.32 breakout as an entry spot. And in such a case, the downslide can drive the market value to the psychological barrier of the $5 mark.

Technical indicator

RSI indicator: The daily-RSI slope shows exceptional growth despite a lateral walk-in price action, encouraging the fakeout theory. 

Vortex indicator: A bullish crossover among the VI+ and VI- slope offers additional confirmation for the $8 breakout. However, the expected spread between this line would accentuate the rise in bullish momentum.

• Resistance levels- $8, $13.5
• Support levels are $6.3, and  $5