Price Analysis

Chainlink Price Eyes $20 Rally As Major Reversal Pattern Emerges

Chainlink price rebounds from $12.2 support, surging 18.45% to $14.4 amid July recovery. The inverted head and shoulders pattern and falling wedge formation suggest a bullish trend reversal.
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Chainlink Price Eyes $20 Rally As Major Reversal Pattern Emerges

Highlights

  • The falling wedge pattern governs the current correction trend in the LINK price.
  • The confluence of 100-and-200-day EMAa at $14.7 creates a supply zone for traders.
  • The intraday trading volume in the LINK coin is $328 Million, indicating a 43% gain.

The crypto market showcased low volatility on the weekend following the neutral candle formation in Bitcoin. Most of the major altcoins including Chainlink (LINK) showed intraday sideways action in an attempt to stabilize after a weekday rally. While the consolidation has stalled the Chainlink price rally at $14.7 resistance the formation of a bullish reversal pattern hints at the potential for an impending breakout.

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Chainlink Price: Falling Wedge Pattern Indicates Trend Reversal

Chainlink Price| Tradingview

Amid the July market recovery, the Chainlink coin managed to bottom out its prevailing correction trend at $12.2. This multi-month support intact since January 2024 has prevented the LINK holds from major correction.

Intersently, the horizontal level aligns closely with the 38.2% Fibonacci retracement level and 200W EMA, creating a high accumulation zone. A bullish turnaround from $12.2 has boasted the asset 18.45 to trade at $14.4, while the market cap jumped to $8.75 Billion.

Moreover, the Chainlink price analysis in the 4-hour chart revealed the reversal as an inverted head and shoulder formation. This chart pattern is in sign-on bottom formation with a fresh breakout opportunity once obtained after the neckline breakout.

A potential breakout from the neckline at $14.7 will accelerate the bullish momentum and may push the LINK price 12% before it faces the next major resistance. 

An analysis of the daily chart shows the development of a falling wedge pattern. In theory, the wedge pattern signals the maturity of a downtrend and the opportunity to launch a counterattack. The two converging trendlines dynamic support and resistance have carried a correction trend for the past 5 months.

Thus, the potential retest to the pattern’s boundary will act as pivotal momentum for the LINK price prediction. A bullish breakout signals an initial sign of trend reversal. The post-breakout rally could drive the Chainlink price.

However, if the overhead supply pressure persists, the LINK coin price may enter another correction and tend to retest $12.2 support.

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Technical Indicator:

  • Exponential Moving Average:  The LINK price jump above daily EMAs 20D and 50D EMA indicates the near-term trend is shifting bullish.
  • Average Directional Index: The falling ADX slope at 27% indicates the prevailing bearish trend is losing its momentum.
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Related Articles

Frequently Asked Questions

What does the ADX indicate

The Exponential Moving Average (EMA) is a type of moving average that gives more weight to recent price data, making it more responsive to new information

Why is the 200-Week Exponential Moving Average (EMA) significant in technical analysis?

The 200-Week EMA is a long-term moving average that smooths out price data over approximately four years.

What is a Fibonacci retracement?

A Fibonacci retracement level is a technical analysis tool used to identify potential support and resistance levels.
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Sahil Mahadik

Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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