Altcoins

What LINK’s momentary bounce means for its downtrend

Disclaimer: The findings of the next evaluation are the only opinions of the author and shouldn’t be thought of funding recommendation

Final week, a detailed have a look at on-chain metrics instructed that traders could possibly be dropping religion in Chainlink. Mid-March had seen traders exit the market and on-chain transactions drop, but the worth of the token had superior steadily to a zone of resistance at $17.5. Prior to now week, Chainlink has dropped again to the $13.5 help stage. Now, the query is- Over the subsequent few hours, will a wave of promoting be initiated as soon as extra?

LINK- 1 Hour Chart

Chainlink sees a momentary bounce, but here is why the downtrend could continue

Supply: LINK/USDT on TradingView

Bitcoin’s sturdy losses the day before today meant that volatility was imminent, as oversold situations on decrease timeframes might see contrarian merchants drive costs increased in the hunt for liquidity. For LINK, there have been two such zones of liquidity the place a promoting or shorting alternative may come up.

The primary and closest one was the $13.95-$14.15 space (crimson field). Doji candlesticks or giant higher wicks might present the presence of sturdy sellers. If LINK is ready to push increased and flip $13.95 to short-term help, the $14.85-$15.1 space could be price watching. With confluence from horizontal resistance at $15.25 as nicely, sellers might make a stand right here.

In both situation, imminent volatility might current dangers to each patrons and sellers within the brief time period.

Rationale

Chainlink sees a momentary bounce, but here is why the downtrend could continue

The RSI shaped the next excessive at the same time as the worth appeared on track to type a decrease excessive. This hidden bearish divergence could possibly be an early sign of the top of the bounce for LINK. The MACD additionally shaped a bullish crossover beneath the zero line. A brief alternative might come up as soon as the MACD line types a bearish crossover beneath the sign line.

To help the bearish bias, the OBV has been in a downtrend for the previous ten days. Furthermore, the latest bounce didn’t have extraordinary shopping for quantity. This meant that the previous downward transfer might resume.

Conclusion

The market construction continued to be bearish on the shorter timeframes, and a transfer previous $14.2 could be essential to flip this bias. The $14.8-$15.3 might pose resistance, and rejection from there might supply a promoting alternative. Conversely, if Bitcoin can climb previous $42k and LINK previous $15.3, the bulls could be emboldened.

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