Charted: Chainlink (LINK) Correcting Gains, Why Dips Remain Attractive

Chainlink (LINK) rallied towards the $26.00 level before correcting lower, similar to bitcoin and Ethereum. The price is now approaching a major support zone at $21.50.

  • Chainlink token price gained pace after it broke $22.00 and it traded towards $26.00 against the US dollar.
  • The price is correcting gains from $25.89 and it is well above the 100 simple moving average (4-hours).
  • There is a major bullish trend line forming with support near $21.50 on the 4-hours chart of the LINK/USD pair (data source from Kraken).
  • The price is likely to find a strong buying interest near the $21.50 and $21.20 levels.

Chainlink (LINK) is Correcting Gains

After a successful break above $22.00, chainlink (LINK) gained bullish momentum above $24.00. The bulls gained strength, resulting in a push above the $25.00 resistance zone.

A new 2021 high was formed near $25.89 and the price settled well above the 100 simple moving average (4-hours). It is currently correcting lower and trading below the $25.00 level. There was a break below the 23.6% Fib retracement level of the recent increase from the $17.19 swing low to $25.89 high.

On the downside, there are many important supports forming near $21.50. There is also a major bullish trend line forming with support near $21.50 on the 4-hours chart of the LINK/USD pair.

Chainlink (LINK)

Source: LINKUSD on TradingView.com

The trend line is close to the 50% Fib retracement level of the recent increase from the $17.19 swing low to $25.89 high. As long as link price is above the $21.50 level, there are chances of a strong increase in the near term. An immediate resistance is near the $24.00 level.

The first major resistance is near $25.00, above which the price is likely to accelerate higher towards the $26.00 and $26.50 levels in the near term.

More Losses?

If chainlink’s price stay above the $21.50 support, there is a risk of a larger decline. The next major support below $21.50 is near the $20.50 level.

Any more losses below the $20.50 level may possibly put the $20.00 support at risk in the near term. In the stated case, the price could revisit the $18.50 support.

Technical Indicators

4-hours MACD – The MACD for LINK/USD is gaining momentum in the bearish zone.

4-hours RSI (Relative Strength Index) – The RSI for LINK/USD is currently just below the 50 level.

Major Support Levels – $21.50, $21.20 and $20.50.

Major Resistance Levels – $24.00, $25.00 and $26.00.

Publication date: 
01/26/2021 - 09:18
Author: 
Disclaimer

The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.