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Chainlink buy the dip opportunity ahead, LINK could retest $31

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  • Chainlink price lost nearly all of its 12% gains on Wednesday after a broader market sell-off occurred.
  • Resistance for Chainlink was not a surprise.
  • Chainlink could retest $31, granting a fantastic buy-the-dip opportunity.

Chainlink price action sent bulls and bears into a tails spin during the Wednesday trading session. After hitting new five-month highs, Chainlink gave up most of the double-digit percentage gains. The drop was a perfect combination of technicals leading fundamentals.

Chainlink price hammered south, as risk-on markets sell-off in response to Evergrande and inflation data

Chainlink price was perfectly positioned for Wednesday’s drop. The high of the day hit right on a confluence zone of resistance levels. The bottom of a primary bear flag channel from June has been the primary stopping point restricting most of Chainlink’s various attempts to make new all-time highs. At the same price level, the 100% Fibonacci expansion contributed to the resistance.

So when news came out regarding China’s Evergrande defaulting on some of its bonds, the selling of risk-on assets like cryptocurrencies happened quickly.

The oscillators on Chainlink’s daily Ichimoku chart show surprisingly neutral conditions. Because Chainlink price is currently trading below the Tenkan-Sen, the following primary support level is the Kijun-Sen at $31. A move to test the Kijun-Sen as support would position the Relative Strength Index on the first oversold level of 50. At the same time, the Optex Bands would be close to the lower extremes.

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LINK/USDT Daily Ichimoku Chart

A hypothetical long entry for Chainlink price would be a buy limit order slightly above the Kijun-Sen at $32, with a stop loss at $30 and a profit target at $45. $45 is the top of the bear channel and the 161.8% Fibonacci expansion. A $0.25 trailing stop would help protect any implied profits on the long trade idea.

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Chainlink Price Analysis: LINK tests previous low at $23, more downside to follow?

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  • Chainlink price analysis is bearish.
  • LINK/USD retraced to $25 yesterday.
  • The previous low at $23 is currently tested again.

Chainlink price analysis is bearish today as we expect another lower low to be set past the current support at $23 as the overall bearish pressure is still strong. Next support for LINK/USD is seen at $22 and likely will be reached over the next 24 hours.

Chainlink Price Analysis: LINK tests previous low at $23, more downside to follow? 1
Cryptocurrency heat map. Source: Coin360

The cryptocurrency market traded in the red over the last 24 hours. Bitcoin lost 0.47 percent, while Ethereum 0.54 percent. Meanwhile, Terra (LUNA) still holds in the green, with a gain of 5.6 percent.

Chainlink price movement in the last 24 hours: Chainlink recovers to $25, continues moving lower

LINK/USD traded in a range of $23.23 – $24.77, indicating a moderate amount of volatility over the last 24 hours. Trading volume has declined by 29.63 percent, totaling $689 million, while the total market cap trades around $11 billion, ranking the coin in  20th place overall.

LINK/USD 4-hour chart: LINK set to drop further?

On the 4-hour chart, we can see the Chasinlink price returning back to the $23 previous low this morning, likely leading to further downside later today.

Chainlink Price Analysis: LINK tests previous low at $23, more downside to follow?
LINK/USD 4-hour chart. Source: TradingView

Chainlink price action has continued to move lower this week. From the previous major swing high at $38, which was set on the 10the of November, LINK/USD has already retraced around 40 percent to the $23 mark.

Yesterday, we saw LINK recover some of the loss and move to retest previous support at $25 as resistance. After some consolidation, bearish momentum slowly returned by the end of the day, leading to more downside overnight.

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The $23 mark was reached around midnight, with small consolidation seen since bears are not yet ready to break lower. However, the Chainlink price should continue lower later today as the overall momentum is still very bearish. 

Chainlink Price Analysis: Conclusion 

Chainlink price analysis is bearish today as we expect further drop lower after bearish momentum saw return this morning. Likely, LINK/USD will see a break lower by the end of the day, with the next support at $22.

While waiting for Chainlink to move further, see our articles on the Best Crypto Wallet 2021, Decred Wallet, and Ripple vs SEC.

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The how, when, why of Chainlink hitching a ride with Bitcoin, to get to $40

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Ever since 2018, Chainlink has shared quite a good bond with Bitcoin. Whenever the king coin pumped, so did LINK. Similarly, whenever BTC lost value, LINK followed in its footsteps.

Over the long term, having a strong correlation with Bitcoin is undeniably healthy. But, in the short term, especially during periods of downtrends, this factor has acted like a major spoilsport for LINK.

Bitcoin-Chainlink correlation || Source: CoinMetrics

Outlining its fading prospects

LINK witnessed quite a good rally in the period between 22 September to 10 November. In the aforementioned timeframe, the alt’s value witnessed a massive jump from $21 to $38.

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Nevertheless, as BTC started going south, LINK was forced to deviate from its uptrend. And in effect, the alt was back to square one, at the time of writing.

LINK/USDT || Source: TradingView

Over the years, Chainlink has already established itself in the space. It wouldn’t be wrong to claim that this network is gradually becoming the most preferred oracle-solution provider.

Previous articles have highlighted how HODLers passively benefited from Chainlink’s partnerships with smart contract developers. However, the same factor, hasn’t been able to do much this time around.

Consider this – Just a day back, Chainlink took Twitter to announce its recent integrations. The list included a host of projects – right from NFT market places to lending pools based on the Binance Smart Chain.

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Had it been a normal non-Black Friday, LINK’s price would have likely reacted positively to the aforementioned set of developments. However, Bitcoin’s choppiness didn’t allow LINK to relish and acknowledge the same.

Other x-factors

Well, most of LINK’s metrics have been in their finest shape of late. Yet, the token hasn’t been able to rally. It is a known fact that a major chunk of Chainlink’s supply is held by whales. Data from Glassnode pointed out that the percent of supply held by the top 1% addresses had witnessed a steep incline over the past week.

LINK supply held by top 1% addresses || Source: Glassnode

Now, whenever whales scooped up tokens, LINK’s price has more often than not, reacted positively. However, this time around, it just didn’t respond to the whale buying spree.

Additionally, the majority of LINK investors have steadily been clinging on to their respective tokens. The same was highlighted by the rising slopes of the mean coin age and the mean dollar invested age.

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Mean Coin Age, Mean Dollar Invested Age – LINK ||

Source: Santiment

Whenever these two indicators rise in conjunction, it usually implies the absence of sell-side pressure. Now, this is a healthy on given day and usually doesn’t trigger a price-dip. The current state of affairs, however, narrate a different tale.

Well, LINK’s depreciating value amidst the healthy state of its metrics indicate one thing – it desperately needs Bitcoin’s support to rally back from this point. In fact, $40 is definitely an attainable target for LINK in the near future.

Nevertheless, keeping the current state of the market in mind, it can be said that it will still take time for Bitcoin to recover from its dip. As a result, LINK’s anticipated rally might just procrastinate a little.

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Chainlink price needs to hold above $22 for LINK to avoid steep crash

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  • Chainlink price is under pressure from global markets entering risk-off mode, creating headwinds in cryptocurrencies.
  • LINK price already broke $24.55, and the monthly pivot at $23.50. 
  • Should market turmoil accelerate, expect a test of $21.62, and a break  lead to acceleration lower.

Chainlink (LINK) price has fallen following  global market turmoil as investor’s increasingly reach for safe-haven assets whilst dropping riskier holdings.. Following these headwinds, bulls have seen yesterday’s gains quickly reversed, and the downturn since the beginning of November gain additional confirmation. Expect a break of $21.62 to see an accelerated sell-off towards $15, accounting for 45% losses.

Chainlink price could form a falling knife as bulls flee the scene

Chainlink faces double support with the historical level at $24.55 and the monthly pivot at $23.25, which for now looks to be holding, or at least slowing down the selling pressure.Sentiment is backing the LINK price to fall further as sell-side volume accelerates and these support levels are now likely to be penetrated. Expect further downward pressure towards $21.62, the historical August 5 level which was also respected during September. 

LINK price may see some let up in the sell off from profit-taking along the way lower, eventually leading to a make-or-break moment when bears try to pierce $21.62. Whilst there may initially be a bounce off that level it will probably be followed by a break below, which would then see a massive acceleration as sidelined bears seek to jump on the descending bandwagon. The move could lead to an overall 30% devaluation..

LINK/USD daily chart

LINK/USD daily chart

$14.95 could provide an eventual bottom, but many bears will want to lock in some profit on the way down at around $17.00 and the S2 support level. At these levels bulls will have the opportunity to pick up Chainlink at a very attractive discount. Expect a reversal from this zone, and a surge to the upside as the buy-side volume overtakes sell-side action, withLINK price rising back up towards $21.62.

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