Chainlink up 100% and signals a correction before further advance

Chainlink is on a tear, but it seems like LINK’s uptrend could be interrupted before it continues advancing. 

Chainlink technical analysis

Since mid-December 2018, Chainlink went through an exponential bullish impulse that saw its price increase nearly 25-fold. But, on June 29 this cryptocurrency finally reached an exhaustion point at $4.80 that triggered a correction. Over the next three months, LINK’s market value retraced 70 percent to hit a low of $1.47 on Sept. 24 and since then it appears to have resumed its bullish trend. 

When looking at LINK’s 1-week chart, it looks like the TD sequential indicator was able to time the correction that began in early July as well as the recent upswing. As a matter of fact, this technical index presented a bearish signal (in the form of a green nine) on the week of July 1, which was then validated. And, during the week of Sep. 16 this indicator gave a bullish signal (in the form of a red nine). This buy signal was recently confirmed when a green two candlestick moved above a preceding green one candlestick. 

Chainlink is currently on a green two candlestick per the TD sequential indicator and trading above the 7-week moving average. These two factors can be interpreted as evidence that LINK has a high probability of a continued surge.

Chainlink US dollar price chart
LINK/USD by TradingView

Based on the 3-day chart, the 61.8 percent Fibonacci retracement zone was able to contain the price of LINK from a further decline. This Fibonacci retracement area is considered by many traders as the ‘golden’ retracement area due to the high probability of a rebound. Chainlink has indeed bounced off this zone and regained the 50 percent Fibonacci retracement level as support. Now, this cryptocurrency could try to test the next level of resistance given by the 38.2 percent Fibonacci retracement area that sits around $3.

Link US dollar price chart
LINK/USD by TradingView

Nonetheless, LINK has already skyrocketed more than 100 percent in the last two weeks since it hit a low of $1.47 on Sept. 24. Due to the significance of this upswing, finding an exhaustion point will be ideal for Chainlink to keep its uptrend healthy. 

This exhaustion point could actually be found within the next few days or even hours based on both the 1-day and 12-hour charts. Under these time frames, the TD sequential indicator presented a sell signal (in the form of a green nine) estimating that a retracement is underway. If validated, the selling pressure behind LINK could increase taking it to test the 50 percent Fibonacci retracement level or even the 100-day moving average that is currently trading around $2.25.

Chainlink US dollar by TradingView
LINK/USD by TradingView

Overall sentiment

In the long term perspective Chainlink is bullish and it may be on its way to make a new all-time high before the end of the year. However, the lower time frames are signaling that this cryptocurrency is bound for a retracement. Such a correction would be needed for investors to take profits from the recent surge and for sideliners to buy in. This could eventually create a spike in volume that results in a larger bullish impulse taking LINK to higher highs. In the meantime, investors should be aware that a pullback could be about to occur. 

The post Chainlink up 100% and signals a correction before further advance appeared first on CryptoSlate.

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