Chainlink Market Analysis  16th January 2021

Chainlink looked to be heavily bullish on the price charts as it broke past its previous all-time high to touch $22.56. While the market-wide correction on 10 January saw LINK fall from $17 to $12.6, its recovery has since been extraordinary. In fact, a $20 withdrawal from the confluence of support levels would be an ideal scenario for traders to enter or add to a long position.

Chainlink 12-hour chart

Source: LINK/USD on TradingView

Using the double bottom formed by LINK at $10.4 at the end of December as the beginning of the LINK ascent, both the Fibonacci retracement level (white) and the Gann fan line (yellow) were plotted. These lines provided some level of support for LINK and projected upside targets.

Moving past the ATH means that LINK has no resistance to the upside over longer timeframes.

The $14 surge has not yet shown clear signs of an imminent pullback, while the 27 percent increase projected a $28 increase for LINK in the coming weeks.

In the event of a drawback, some areas of interest have been highlighted where the price may be expected to react. Furthermore, LINK’s shorter timeframes showed a bearish divergence between price and momentum, which could contribute to a slight dip in LINK’s charts.

On the 12-hour chart, the RSI and the Stochastic RSI climbed into overcrowded territory, but there was no evidence of an imminent pullback. Rather, he pointed to the strength of the bullish momentum behind LINK.

The first was a region of $19.8-$20. This region is a confluence of the previous ATH, as well as an area where the price stalled on a shorter timeframe, making it a former supply-to-demand region.

Below this line, there were $18.89 and $17.5 levels of support, but there was no evidence yet to show a drop deep enough to test these levels.

The long-term outlook for LINK still remained strongly bullish at press time, and the next week or two could see LINK reach the projected $28-mark. For just the surge from $13.2 (The dip on 13 January) to $22.7, the 27% extension level gave a target of $26.

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