After a 10% increase over the past week, Chainlink’s (LINK) price has retested $15. However, according to several technical indicators and on-chain data, LINK’s price rally might not be over.
As a result, the altcoin is setting its sights on a return to $20 after successfully breaking out of a bullish pattern that has been forming over the past few weeks.
But will LINK stay true to this forecast? This analysis checks the possibility.
Chainlink Validates Bullish Outlook
Chainlink price reached a yearly high of $27.28 on Jan. 22. By March 11, the altcoin’s value had dropped to $12.55.
This correction happened due to rising selling pressure as LINK hit lower and lower highs. Hitting lower highs and lows led the token to form a falling wedge on the daily chart.
Over the weekend, Chainlink’s price broke out of the upper trendline of the falling wedge and validated the bullish breakout. Amid the breakout, CCN observed that the Moving Average Convergence Divergence (MACD) reading bounced to the positive region.
The rise in the MACD reading indicates rising bullish momentum. If sustained, this could keep Chainlink’s price aiming for higher levels in the short term.
Besides the technical outlook, on-chain data shows that Chainlink’s price might trade higher than $15 soon. We observed this after analyzing the In/Out of Money Around Price (IOMAP).
With the IOMAP, one can tell if a cryptocurrency has strong resistance or support. The higher the volume of tokens at a price range, the stronger the support or resistance.
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According to IntoTheBlock, the crucial support for LINK is around $14.60. At this price range, about 20,000 Chainlink addresses accumulated over 90 million tokens.
This volume is higher than those purchased between $15.56 and $17.63. Considering this position, LINK’s price will likely rise above the upper resistance level, close to $18.
LINK Price to Continue Climbing
The Relative Strength Index (RSI) has surpassed the 50.00 neutral line in the daily chart. This indicates bullish momentum around the Chainlink token.
Typically, when the RSI drops below the midpoint, momentum is bearish. However, since it is the other way around, it reveals that LINK’s price direction has the backing of the bulls.
In addition, the Money Flow Index (MFI) has followed a similar direction as the RSI. This indicates rising buying pressure.
If sustained, Chainlink’s price might jump to the 0.618 Fibonacci level at $19.14, with a high chance of surpassing $20.
However, if the token gets overbought, this might not happen, as LINK could pull back toward $11.86.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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