Chainlink's price registered a 100% gain from July 21 to August 13, gaining traction on the widespread interest in Defi tokens and making it the best 24-day gain since January. The impressive rally met heavy resistance level at the 200-day SMA and has been trending at or below the moving average over the last six sessions, busting the July ascending trend line channel on August 17. Based on the stifling resistance level and the break of the trend line, there is a high probability that LINK price falls into a deeper pullback.
Chainlink's price has met the heavy resistance level at the 200-day SMA at $28.02, which is reinforced by the 38.2% Fibonacci retracement level of the May-July cyclical correction at $28.51 and a range of price congestion from late May and early June. The resulting consolidation has knocked LINK price below the tactically important July ascending trend line after two negative days on the largest volume since June 22.
Due to the bearish technical developments over the last six sessions, Chainlink price is now in a vulnerable position with no noteworthy support level until the 50-week SMA at $21.95, closely followed by the July 7 high at a price of $21.27, the rising 50-day SMA at $20.56 and then the influential 2020 high of $20.00. A LINK price decline to the 2020 high equates to a 24% loss from the current price.
If the Chainlink price does not command a strong support level at 2020 high, it risks falling to the 2018 ascending trend line at $15.75, thereby rejecting the bullish long-term meaning of the LINK price rally from July low.
To pursue a continuation of the rally to the May high of $52.99, the Chainlink price needs to beat the dominant resistance framed by the 200-day SMA at price $28.02, the 38.2% retracement level at $28.51and the 50% retracement level at $33.15. To break the five-point range, LINK will need the fever surrounding the Defi space to sustain the momentum in the weeks ahead.
Chainlink price is at a technical crossroads, explained by looming resistance level, a broken uptrend, and no immediate, credible support. Under those conditions, there is no reason for LINK price speculators to engage the altcoin until it has booked a daily close above the 50% retracement at $33.18. It is time to accept that easy money has been made.
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