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ChainLink / USD Technical Analysis: On The Edge

Medium term is still bullish, but the point of no return could be reached soon.

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  • ChainLink is bearish in the short-term with the cryptocurrency below key support and price starting to make bearish lower lows
  • A bearish head and shoulders pattern is also taking shape across the four-hour time frame
  • The medium-term outlook for LINK / USD is currently bullish, although the cryptocurrency is sliding back towards its 200-day moving average

ChainLink / USD Short-term price analysis

 

ChainLink has turned bearish over the short-term, with the cryptocurrency creating bearish lower lows and falling below its key 200-period average on the four-hour time frame.

Bulls have repeatedly failed to break above the November 2018 trading high, with the upside technical failures helping to create a potential head and shoulders pattern on the four-hour time frame.

Continued weakness in the LINK / USD pair will likely prompt a key test of the January 10th trading low, which is also the neckline of the previously mentioned head and shoulders pattern.

 

 

LINK / USD H4 Chart                                                                         (Source: TradingView)

 

 

Pattern Watch

If bulls fail to rally the LINK / USD pair above its current yearly trading high, the chances of a bearish head and shoulders pattern forming will dramatically increase.

 

Stochastic Indicator

The Stochastic indicator on the four-hour time frame is attempting to correct higher, which could signal a potential re-test of the pair’s 200-period moving average on the four-hour time frame.

The short-term sell-off is partially caused by the market downtrend. In addition, investors might also start taking profits, from the bull run that happened for the past six months, which can be better seen in LINK / ETH and LINK / BTC pairs.


ChainLink / USD Medium-term price analysis

 

The LINK / USD pair remains bullish over the medium-term, with the cryptocurrency trading above its 200-day moving average since the start of the year.

ChainLink is starting to come under increasing selling pressure and is now moving closer towards its 200-day moving average. Furthermore, the LINK / USD pair has recently broken below a well-defined triangle pattern on the daily time frame.

The Ichimoku cloud on the daily time frame chart also highlights that bearish selling pressure is increasing, with the cryptocurrency falling back inside the cloud and testing towards the actual baseline of the Ichimoku cloud.

 

 

LINK / USD Daily Chart                                  (Source: TradingView)

 

 

Pattern Watch

Traders should watch for continued weakness below the triangle pattern on the daily time frame, as it may signal the start of a stronger decline in the cryptocurrency.

 

Cloud Watch

Price is now trading clearly inside the Ichimoku cloud on the daily time frame with the Kijun-sen line offering major technical support.

 

MACD Indicator

The MACD indicator on the daily time frame is turning lower, with a bearish line crossover currently underway.

There are several reasons for the bullish medium-term potential of the project. The project is trying to solve the biggest problem of smart contracts, the lack of oracles. It might be the closest of any project to offering a solution. Fundamentally it remains strong and faces little in terms of public competition.

In addition, the project has been trading near its ATH from January 2019, in terms of BTC and ETH and overall has shown a bullish pattern for the past few months for these trading pairs, which may signal confidence in the project from the crypto faithful.


Conclusion

 

Traders should closely monitor ChainLink over both time horizons; the LINK / USD pair is currently at risk of losing its medium-term bullish outlook, with the cryptocurrency edging closer to major technical support on the daily time frame.

Traders should note that the LINK / USD pair has traded above its 200-day moving average since the start of the year; a bearish break under the 200-day should provoke strong technical selling.

However, technical selling is not driven by changing fundamentals or recent news and does not affect the overall positive story for the project.

 

  • chainlink
  • ChainLink
    (LINK)
  • Price
  • Market Cap
    $175,048,663.71

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