The equity indices are celebrating at the start of the week. Indeed, the fact that the BOE and the RBA (respectively central bank of England and Australia) have undertaken less restrictive actions on their monetary policy, would suppose that the FED could soon imitate them. Except that the latter, for a long time, has been mainly concerned about what is happening in the United States.
Besides, the US central bank never reacted when key rates (Federal Funds) were lower than Core PCE inflation. So much so that we wonder about the solidity of the current rebound.
Proof, cryptocurrencies are not benefiting much from the recent bullish momentum. Because precisely, let’s not forget that they are suffering from the absence of abundant central bank liquidity. Especially since some of them are struggling to recover from the last wave of correction last spring.
And it is currently the case of the Chainlink token, LINK which vegetates in a tidy or horizontal channel since mid-June. But an exit from this pattern would tell us more about whether or not its bear market continues. Hence the expectation of new catalysts which could appear at one time or another.
Chainlink – A range between $6 and $9 since mid-June
Since mid-June, LINK prices are moving in a well-defined range between the support at $6 and the resistance at $9. Even better, they are approaching the descending line and the 30-week moving average (MM30 weekly). To the point that we would imagine a beginning of the end of Weinstein’s phase 4, and therefore a possible neutralization of his bear market since his last ATH in May 2021.
In this sense, the technical indicators continue to move towards their respective fold lines in weekly units. That being said, this price stability follows a significant downward movement that shattered hopes of a favorable trend reversal. This is why the tidy would indicate a lull in the downside pressure rather than a resumption of control by the buyers.
In any case, if this configuration were to persist for a few weeks, the output would promise to sparkle. This is what we will see by analyzing the daily chart by defining the scenarios that would arise one way or the other.
Chainlink – An exit from the range that will undoubtedly do damage
In daily units, we see a tidy quite extensive that could presage a large-scale movement in the event of an exit. For now, the Chainlink token has been hovering below the $8 intermediate resistance since mid-September. But at the same time, the MACD and RSI are trying to stay on the right side of the barrier.
This favorable technical signal from the technical indicators would keep the hopes of LINK prices revisiting the highs again. tidy at $9. And suddenly, they would come back in contact with the 200-day moving average (MM200 daily) and the descending line. Assuming a top-down exit, we would potentially end Weinstein’s Phase 4. On the sine qua non condition that prices rally the resistance of $14.
But between the lines it would be necessary to break the resistance of $18 upwards to erase from memory the hard memory of the wave of correction last spring. And so, we could start again on a sound basis in terms of structural trend.
Otherwise, the break of the $6 support would precipitate the LINK to new lows for the year. In this sense, the sellers would project towards the target at $3.5. And if the market context were to experience excessive stress, we would fear a capitulation of the buyers. With prices falling towards March 2020 levels around $1.5.
LINK – End of the bear market imminent?
Many investors believe that the cryptocurrency bear market has lasted long enough. Under the pretext that the bad news would be largely integrated into the courses. The idea of hoping that the FED would give in to the sirens of a slight decline in its monetary tightening could bring a breath of fresh air to this risky asset class having toasted since November 2021.
This would pave the way for a neutralization of its bear market. As such, the Chainlink token would pull out of its range upwards. However, it would take a huge percentage of gains to make up for all the losses accumulated since May 2021. And the least we can say at this point would be to forget the prospects of a new bullrun.
Because precisely, the trend of the Dollar Index (DXY) remains bullish whether we like it or not. Although we are seeing consolidation from its last highs of the year, Weinstein’s Phase 2 remains firmly entrenched. Therefore, let’s not naively believe that the worst on the LINK or cryptocurrencies in the broad sense is behind us. Hence the possible danger of false technical and fundamental buying signals, which in reality would contribute to the extension of the bear market.
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