Disclaimer: The conclusions of the following report are the sole opinions of the author and should not be taken as investment advice.
Chainlink gained popularity in 2020 and has an environment that is reminiscent of the XRP Army back in 2017 and 2018. However, unlike XRP, the price of Connection reached $20, with cryptocurrency trading at $12.5 and placed 10th on CoinMarketCap charts.
Chainlink 6-hour chart
Unlike other altcoins, LINK seemed to be showing a pattern during its ups and downs, with its slopes serving as support and resistance levels. Since December, although the price of cryptocurrency has slowed, it has been in the consolidation process. Consolidation appeared to be a descending triangle, with a fakeout recently leading to a sudden 23+ per cent decrease in the 6-hour candle. However, after this decline, the price has risen, with the same in the descending triangle trend. If this is to continue, we may expect LINK to evolve further and pass sideways.
The RSI indicator reported an uptick following its drop during the forgery, a finding suggesting a healthy recovery. While it wasn’t bullish yet, it wasn’t bearish either. However, since the Stochastic RSI was in the over-purchased zone, we can expect the price to be lower while managing to remain in the pattern.
In addition, the Fibonacci retracement stage also told a significant tale. The amount of 0.382—Fibonacci at $12.158 would serve as price support, stopping it from going down.
In the short-to-medium-term scenario, we can expect LINK to remain stuck within the pattern. However, theoretically, there should be a decrease towards the end of the pattern.
A wild card scenario would be a flash crash of LINK’s price from this pattern. In the light of the bullish rally of Bitcoin without a pullback, there could be a possibility for LINK as well as other altcoins to drop if the BTC crashes aggressively.
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