The cryptocurrency market seems to have regained some stability after the collapse of the UST stablecoin. A context that allows the Chainlink project to record a rebound above a critical support. Even better, the LINK has been outperforming Bitcoin for several sessions. The real question is whether this unusual momentum in a bear market will continue. Or if reality will sooner or later catch up with this cryptocurrency.
This analysis is offered to you in collaboration with Le Trading du Coin and its algorithmic trading solution.
The latest technical analyzes of LINK prices indisputably show a bearish market, having taken date from the week of April 04th. This is followed by a dizzying drop of almost 50% in its market capitalization. The latter visibly stopped, with the support of $7 as a drop point. As a result, sellers might be tempted to take part of their winnings. With in perspective, the hypothesis of a technical rebound before they rebuild their stocks when the time comes.
Chainlink – The support of $7 in support
After ending its streak of eight consecutive weeks of decline, the LINK confirms for the moment the beginning of a technical rebound on the support of $7. But, like the main cryptocurrencies in the sector, it definitely settled in a bear market when it broke the resistance of $16. And now, the unfavorable technical signals that he will have to encounter may represent headwinds vis-à-vis a possible favorable trend reversal.
However, the slight recovery in form on the side of the technical indicators in weekly units would make it possible to see more clearly about the technical rebound. Because, if LINK prices move beyond the $7 support, as is the case this week, a return towards the $16 resistance could be expected. Especially since this would coincide with a crossing of its descending line, initiated since its last ATH in May 2021.
However, cryptocurrency investors should not get fired up about the possibility of a new LINK bull market. Because precisely, the moving average at 30 weeks (MM30 weekly), which evolves in the same direction as the descending line, testifies to a phase 4 of Weinstein. So much so thatit will sooner or later slip below the resistance of $16given the current price dynamics.
Chainlink – Favorable Technical Signals
The daily chart offers us some good news in the short term. First, the technical indicators are breaking their respective float lines. And more particularly, the RSI which is above the neutral zone at 50. Second, LINK prices managed to break out of its mini tidy around the $7 support. By coordinating these favorable technical signals, it would open the door to the technical rebound evoked in weekly units.
Sellers seem to be giving way to buyers. Nevertheless, they would do well to keep their feet on the ground. Because, just like the weekly 30MM, the 200-week moving average (daily 200MM) is on a downward slope and parallel to the descending line. And it can act as a major resistance, just like that of $16. What remains unfortunately a technical signal having more weight, compared to those quoted in the preceding paragraph.
LINK – An outperformance against BTC to be put into perspective
Despite an outperformance against Bitcoin over the past few days, the Chainlink still remains in a bear market. And with the hoped-for altseason light years away, investors should remain focused on Satoshi Nakomoto’s digital currency to gauge the state of the cycle the cryptocurrency market is in.
In addition, crossing the downward line is not an end in itself. And the risk is to conclude too quickly to a favorable trend reversal. Because if that were to happen, with a MM30 weekly and a MM200 daily on a downward slope, we would risk seeing a false favorable technical signal, with the objective of trapping buyers again. While, at the same time, Bitcoin struggles to return to its low tidy or horizontal channel and stays away from its reversal levels.
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