Has Chainlink begun a rally toward $9.4? Here are some levels to watch out for

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Dis­claimer: The find­ings of the fol­low­ing analy­sis are the sole opin­ions of the writer and should not be con­sid­ered invest­ment advice

  • The mar­ket struc­ture was bear­ish but the recent ral­ly could shift this 
  • Exchange inflows also saw a huge spike

Chain­link saw some pos­i­tive news in the past few days, amid the car­nage that the mar­ket wit­nessed in the wake of the FTX cri­sis. Active address­es soared to a high that was pre­vi­ous­ly wit­nessed in May 2021. This could be a sign that Chainlink’s recov­ery might be strong.

Read Chainlink’s Price Pre­dic­tion in 2023–24

Bit­coin saw a dip to $15.4k ear­li­er this week but it was quick­ly reversed in the past 24 hours of trad­ing. Was this move upward the gen­uine begin­ning of a ral­ly, or was it more of a bull trap?

Chainlink climbs back above $6.2 but the bulls still need to fight against the bearish pressure

Chainlink begins recovery from range lows as bullish impetus sets in

Source: LINK/USDT on TradingView

Chain­link trad­ed with­in a range (yel­low) since May. This range extend­ed from $9.45 to $5.62. In the past few days, the range lows were once more respect­ed and the price saw a bounce there. Trad­ing vol­ume also increased in the ral­ly from $5.6, which sug­gest­ed some demand was present behind the move.

How­ev­er, on the 1‑day chart, the price still had a bear­ish struc­ture. LINK need­ed to flip the $6.5-$6.65 region from resis­tance to sup­port before the bulls can have some con­fi­dence in a move toward $7.5 and above.

The RSI remained beneath the neu­tral 50 mark to high­light that the bulls do not yet con­trol the direc­tion of LINK. Mean­while, the OBV also broke beneath the high­er lows it formed in Octo­ber. This was a set­back for the buy­ers, who had shown steady buy­ing pres­sure since mid-July.

The $6.2 lev­el was also bro­ken in the recent low­er time­frame ral­ly, and a retest of the same could offer short-term traders a buy­ing oppor­tu­ni­ty. For longer-term traders, buy­ing in the $5.6-$6.2 region on a retest with bull­ish tar­gets of $7.5 and $9.4 was pos­si­ble. Inval­i­da­tion of this idea would be a ses­sion close below the $5.6 mark.

Dormant circulation and exchange inflow see an enormous spike

Chainlink begins recovery from range lows as bullish impetus sets in

Source: San­ti­ment

Devel­op­ment activ­i­ty was on the rise in the past two weeks. High-time hori­zon investors can take heart in the fact that Chain­link saw a good amount of devel­op­ment activ­i­ty in the past few months and it was not cor­re­lat­ed to the price action.

Exchange flow saw a huge spike in the past few days. This showed a large inflow of LINK tokens into exchange wal­lets. It was unclear whether a wave of sell­ing will fol­low, or whether the tokens were deposit­ed for deriv­a­tives pur­pos­es. How­ev­er, a sell­off sce­nario was some­thing traders might need to fac­tor in.

Dor­mant cir­cu­la­tion also saw a large spike on 22 Novem­ber while the price ral­lied from $5.6. Once again, the spike in dor­mant cir­cu­la­tion was some­thing that traders need to be cau­tious with. How­ev­er, in the past three months, spikes in dor­mant cir­cu­la­tion have not nec­es­sar­i­ly been fol­lowed by a price crash.

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