Chainlink Price Analysis: Wedge Pattern Fakeout may Pump LINK by 15%

The LINK sellers’ failed attempt to follow through on wedge pattern fallout triggers a rounding bottom recovery. As a result, the altcoin renters the wedge pattern indicating a bear trap. Furthermore, the rising price should soon hit the descending trendline to reattempt a bullish breakout.

Key points: 

• The LINK price has gained 32% in the last 5 five days
• The daily-RSI slope enters the bullish region
• The intraday trading volume in the LINK token is $797.5 Million, indicating a 53.5% gain.

Source- tradingview

After the LINK/USDT pair reverted from the November 2021 high of $36.1, the coin price systematically fell within a descending wedge pattern. Though the pattern usually gives a bullish breakout, the recent bloodbath in May triggered a decisive fallout.

The LINK price reached a low of $5.64, but sellers couldn’t follow through with the bearish breakout resulting in a minor consolidation just below the breached support. Furthermore, the buyers took advantage of the lack of bearish commitment and surged the LINK price back inside the wedge pattern.

This fakeout may punish the aggressive sellers, and their forced liquidation would bring additional buying orders. The sustained buying would allow buyers to rechallenge the overhead resistance trendline and $9.8.

A possible breakout from this resistance may propel the LINK rally to the nearest target at $12.75.

Technical indicator

RSI indicator: The RSI slope has been exceptionally rising throughout the consolidation phase, indicating growth in bullish momentum. This bullish divergence has surged above the midline(50%), bolsters the recovery theory.

EMA: the recovery rally has so far reclaimed the first line of EMA defense(20 EMA), which has flipped to valid support. However, the coin price is nearing a combined resistance of $8.75 and a 50-day EMA, which may stall the bullish rally.

• Resistance levels- $7.5, $9.8
• Support levels are $6.63and $5