Tezos and Chainlink Are Back, 18% Surge in 24 Hours
Tezos appears ready for a significant movement based on the technicals. Meanwhile, Chainlink's future is more uncertain.
Key Takeaways
- Tezos and Chainlink are up over 70% in the last two weeks.
- XTZ seems to be preparing for a further advance to $2.6.
- Meanwhile, technical patterns present ambiguous outlooks for LINK.
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Tezos and Chainlink are back in the green after surging over 18% in the last 24 hours. Now, both of these cryptocurrencies are testing key resistance levels that could be the catalyst for a further advance.
Tezos Prepares for Significant Price Movement
After peaking at a high of $4 in mid-February, Tezos experienced a major sell-off that pushed its price all the way down to $1. From a technical perspective, the bearish impulse appears to have been triggered by a rejection off the upper boundary of a parallel channel where it has been contained since 2018.
Since then, each time XTZ rises to the top of the channel, it drops down to hit the bottom of the channel, and from this point, it bounces back again. These are the primary characteristics of a channel.
Now that Tezos took a 70% nosedive to the lower boundary of the channel, it appears like this support level was able to hold. Indeed, this barrier prevented a further decline allowing XTZ to rebound by nearly 80% over the last two weeks.
Based on historical data, this cryptocurrency could be on its way up to test the resistance presented by the middle line of the parallel channel, which will eventually determine where it is headed next.
Adding credence to the bullish outlook, an ascending triangle appears to be forming on XTZ’s 4-hour chart. This technical pattern is developing as a consequence of the price action seen in the last two weeks. A horizontal line was created along with the swing highs while a rising trendline developed along with the swing lows.
Breaking above the resistance trendline that sits around $1.8 could trigger a break out of the pattern. A further spike in the buying pressure behind this cryptocurrency could push its price up over 40% to $2.6. This is also where the middle line of the parallel channel mentioned before sits.
Although a breakout could take place at any minute, the TD sequential indicator is currently presenting a sell signal in the form of a green nine candlestick within the same time frame. The bearish formation suggests a one to four candlesticks retracement before the continuation of the uptrend.
If validated, Tezos could drop to the hypotenuse of the triangle, bounce off this support level, and then breakout of the pattern.
Nevertheless, if the selling pressure behind XTZ is strong enough it could jeopardize the bullish outlook. Breaking below the pattern and making a lower low below $1.5 could trigger a steeper decline.
Since symmetrical triangles can also form as reversal patterns to an uptrend, Tezos could plunge over 40% instead to hit a target of $0.9.
Chainlink Presents Ambiguous Outlook
Chainlink was one of the top performers in the run-up seen throughout the entire cryptocurrency industry in the beginning of the year. In a matter of three months, this cryptocurrency skyrocketed over 200%.
As the global financial markets began to tumble amid fears over the ongoing pandemic, LINK saw its price depreciate nearly 70% reaching price levels not seen since September 2019. While the retracement was quite significant, Chainlink has been able to recover over 50% of its value during the last few weeks.
Now, this cryptocurrency is testing the resistance presented by the 78.6% Fibonacci retracement level. Closing above this hurdle could see it rise to the 61.8% or 50% Fibonacci retracement level. These resistance levels sit at $2.9 and $3.3, respectively.
Nonetheless, an increase in the selling pressure behind Chainlink around current price levels could trigger a retracement to the December 2019 low of $1.6 or lower.
The ambiguity in Chainlink’s future can also be perceived on its 4-hour chart. Within this time frame, a symmetrical triangle seems to be developing for over the past two weeks. This technical pattern is indicative of a consolidation period before the price is forced to move in a positive or negative direction.
By measuring the distance between the initial high and low of the pattern and adding it to the breakout point, the symmetrical triangle suggests a 47.5% target. An increase in the buying pressure behind LINK could send its price up to $3.4, which is also where the 50% Fibonacci retracement level sits.
A move above the recent swing high of $2.5 could be used as confirmation that this cryptocurrency is breaking out in an upward direction.
Meanwhile, a candlestick close below the recent swing low of $2 may indicate that LINK is preparing for a steep decline. Breaking below this support level has the potential to trigger panic sell among investors pushing its price down 47.5% to $1.14.
Moving Forward
While the Federal Reserve prepares to unload an “infinite amount of cash” to support “smooth market functioning,” the cryptocurrency industry appears to be benefiting the most from the news. Tezos and Chainlink are among the biggest gainers since the announcement of the new stimulus programs.
Now, it remains to be seen whether investors will flood the crypto market for it to continue its historic uptrend.
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