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Since last weekend, the Chainlink (LINK) coin has been outperforming its peers, following the tradition of the “Uptober rally” in the crypto market. Over the past four days, the coin price has surged from $7.26 to its current trading level of $10.47, marking a notable 44% gain. This rally has led to a massive breakout from a falling wedge pattern that has been influencing the LINK price since May 2022.
Also Read: Bitcoin (BTC) Price Forms Support as $30K as Dominance Returns to Multi-Year High
What’s Ahead for LINK Price After 27% Surge in Last Three Days
- The formation of a falling wedge pattern after a significant downtrend indicates the exhausting bearish momentum
- A bullish breakout from the resistance trendline sets a 36% recovery ahead
- The intraday trading volume in the LINK coin is $1.2 Billion, indicating a 501% gain.
Source- Tradingview
Over the last 16 months, the Chainlink coin price followed a shallow downtrend under the influence of a falling wedge pattern. In theory, the converging nature of the two trendlines reflects the prevailing downtrend is losing momentum, which also buyers to recuperate the bullish momentum.
However, with the Bitcoin price recovery showing sustainability above the $28000 mark, the crypto market sees a surge in buying pressure. Thus, the LINK price in line with this broader market trend gave a decisive breakout from the pattern’s upper trend line on 21st October.
Amid this breakout, the Coinglass data shows that around $3.51M in short positions and $668.08k in long positions liquidated from the market. This huge amount of excited short positions would pour more buying orders into the market, boosting the current bullish momentum.
Thus breakout reflects an early sign of the end accumulation phase and the start of a fresh rally. Under the influence of this bullish pattern, a suitable target for the ongoing rally should be $12.6, accounting for a potential gain of 36%.
Is Current Recovery Sustainable?
In terms of intraday movement, the LINK price is showing a 5% gain, offering a promising follow-up to its recent breakout. However, the coin is currently trading at $9.34 and faces selling pressure at a long-coming horizontal resistance of $9.40. As evidenced by high-wick candles, this overhead supply could trigger a minor pullback to retest the breached resistance levels. If coin buyers manage to hold above the $8 support level, it could extend its current recovery towards the aforementioned target of $12.7.
- Average Directional Index: An uptick in ADX slope around 15% reflects the buyers have enough momentum for further trend.
- Exponential Moving Average: The 200-weekly EMA near $10 could increase the resistance strength on this level.
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