Technical Analysis: Chainlink (LINK)
Chainlink continues to consolidate. Will it finally breakout, or do we experience a sell-off soon? Read more to find out!
Table of Contents
What is Chainlink?
LINK / USDT on the Monthly chart
LINK / USDT on the Weekly chart
LINK / USDT on the Daily chart
Summary
Chainlink (LINK) is starting to gain attention from other communities. At the time of writing, LINK is ranked as the 14th largest cryptocurrency according to Coingecko. The market cap is sitting around $14 billion.
Price action is starting to show signs of life after selling off in June/July. Before jumping into the charts, let’s take a step back and understand what the project is about.
What Is Chainlink?
Chainlink is a decentralized blockchain oracle network built on Ethereum. The network is intended to be used to facilitate the transfer of tamper-proof data from off-chain sources to on-chain smart contracts.
Chainlink greatly expands the capabilities of smart contracts by enabling access to real-world data and off-chain computation while maintaining the security and reliability guarantees inherent to blockchain technology.
LINK/USDT on a Monthly Chart
Looking at the logarithmic chart to make things easier to view.
When you compare the price action seen in 2019–2020 with today’s price action, you will start to notice a lot of similarities:
- LINK makes new all-time highs
- Consolidation follows ATH followed by a sharp sell-off (50–70%)
- Price rises again and forms a higher low
- Minor consolidation and then price looks for another ATH
Since its inception you can LINK has risen massively in roughly 2 years. With a market cap of $16-billion, we may be seeing some slower growth (price-wise). However, it also looks like LINK is getting ready to make a move.
LINK/USDT on a Weekly chart
Sticking to the logarithmic chart, and dropping a Fibonacci retracement from the March low. Fibonacci was switched to display log values.
Fibonacci swing low is the March’20 low, while the swing high is May’21 high. This is where we found equilibrium.
After LINK prints an ATH, a falling wedge pattern forms. The most recent wedge shows a low in May’21 and a retest of the low in Jul’21. At the same time, volume was falling with price, and price action is starting to form a higher low inside the wedge pattern.
Price action is now looking to break its previous high from Sep’21.
LINK/USDT on a Daily chart
Shifting over to our trigger timeframe we get a better look at the descending wedge, and price now heading towards resistance.
A daily close above $31.50 is a good sign we’ll continue to the upside. Also on the table is a rejection from this resistance level that could push LINK towards $25.
Summary
Chainlink is a decentralized blockchain oracle network built on Ethereum. The network is intended to be used to facilitate the transfer of tamper-proof data from off-chain sources to on-chain smart contracts.
- The monthly chart shows an uptrend, repetitive structure, and price heading towards resistance.
- The weekly chart shows the patterns forming on the chart, Fibonacci levels as support, and volume following price.
- The daily chart zooms in on the most recent price action, shows higher lows forming, and price approaching resistance.
- A daily close above $31.50 is a good sign we continue to the upside. Otherwise expecting consolidation at this level.
Remember that this is all based on the subjective views of the writer. As always do your research — youngcryptowolf 🐺
The contents on this site are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else.
