- Chainlink (LINK) trades inside a confluence of supports at $13.
- The LINK price trades inside long- and short-term channels.
- Has Chainlink’s correction ended, or will the price fall again?
Chainlink’s price rallied on April 7 but has fallen since May 12. The 38-day correction erased most of the previous gains and took Chainlink inside a long-term support level.
Nevertheless, Chainlink news is positive. Chainlink CEO Sergey Nazarov believes the passing of the GENIUS Act will kick off a wave of new stablecoins in the U.S.
Chainlink is uniquely positioned to benefit from the bill since its cross-chain connectivity can help stablecoins become a legitimate source of payments.
Let’s examine a few charts and determine if LINK has bottomed.
Chainlink Price Analysis
The weekly time frame technical analysis shows that Chainlink’s price trades inside a confluence of support levels at $13.
The $13 horizontal support area and the trend line of an ascending parallel channel create support.
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Since both these levels have existed for over a year, this is a critical support area that can determine if the future trend is bullish or bearish.
The Chainlink price has created higher lows since July 2024, and a breakdown below this area will invalidate those and the parallel channel.
Alternatively, the primary resistance will be $24 if a bounce occurs.
Despite trading at support, technical indicators lean bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are falling.
They are below their bullish thresholds at 50 and 0, respectively.
Therefore, the weekly time frame chart does not confirm if the LINK price prediction is bullish or bearish.
LINK Correction Ending?
The daily time frame chart gives a bullish LINK prediction, suggesting a near reversal.
However, the wave count suggests another slightly lower low is likely before a trend reversal.
The wave count shows a completed five-wave upward movement (green) since April 7, suggesting the price has begun a bullish trend reversal.
Since the May 12 high, LINK’s price fell in a corrective manner inside a descending parallel channel. This is a sign that the price is retracing after its impulsive rally.
However, the LINK price is likely in a W-X-Y corrective structure (red), which will take it to $11.80, the 0.786 Fibonacci retracement support, and the channel’s trend line.
A bullish divergence also develops in the RSI, which could be confirmed with a lower low.
One More Low
The LINK price trades inside a confluence of long-term support levels, an ideal spot for a bullish trend reversal.
However, the short-term chart suggests another low is likely before an upward movement.
As a result, Chainlink’s price could fall to $11.80 before resuming its upward trend.
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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