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Chainlink’s inverse head & shoulder breakout could not keep its spot above the 3-month trend-line resistance. Sellers continued to secure new multi-month lows up to mid-June as LINK traversed beneath the southbound Exponential Moving Average ribbons.
LINK has had its price action compressed around the POC (Point of Control) for almost one month. A possible dip into volatility might trigger a trend-shifting rally within the coming days. While publishing this content, LINK changed hands near $6.2.
Chainlink Daily Timeframe
Expected reversals from $9.2 saw LINK’s slump rearranging into a triangle-like pattern. Sellers triggered a 44.78% decline from June 10, sending LINK towards its 2-year lows on June 13.
The previous month saw impressive bullish attempts, with the alt recording an uptick on troughs. Nevertheless, the trend-line resistance halted the peaks and propelled a squeeze at the POC territory.
Moreover, the Supertrend refrained from altering its bearish outlook for approximately a month as it maintained a southbound stance. A closing beneath the triangle’s bottom trend-line might catalyze downside breaks.
That might expose LINK to a 10% decline towards the range support at $5.5 – $5.9. immediate recoveries would possibly lead to slowdowns from the exponential moving average ribbons and the resistance at $6.8.
Reasoning
The RSI (Relative Strength Index) could not overcome the equilibrium limits for more than a month. The index adopted sideways moves as it exhibited a slight selling edge. Meanwhile, the Chaikin Money Flow remained beneath the zero level following its devaluation within the previous week.
A sustained move beneath this mark would favor continued selling activity. On the other hand, the ADX flashed a significantly weak directional bias for the alternative tokens.
Final Thought
LINK might witness a short-term bearish pull as rejection from its trend-line resistance triggers reversals from the Point of Control. A decline beneath the prevailing pattern might trigger more slides for the alt. Meanwhile, price targets would stay as highlighted above.
Possible bearish invalidations might witness a sluggish phase around the Point of Control zone. Lastly, a broad market sentiment outlook is essential to ensure profitable moves after analyzing technical factors.
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