Chainlink bears made a move to print lower highs while testing the 14-month support at $11.7 since LINK hit its January peaks. Meanwhile, the latest downward action created a declining wedge on the token’s 4hr chart.
Meanwhile, LINK increases its probability of closing beyond the longer-term Point of Control after formulating a morning star bullish candle pattern. With such scenarios, the alt might recover towards the trend-line resistance. While publishing this blog post, Chainlink traded around $13.28.
Chainlink 4Hr Timeframe
The latest declines since January 11 had the alternative token losing over 60% of value, plummeting towards 13-month lows on February 24. As the $11.7 support historically acted as a massive buying region, Chainlink reversed to create an inverse head-shoulder.
However, the rend-line resistance shunned this recovery as the alt re-entering a constricted phase. The past couple of days had the downward channel reversing into a plummeting wedge. Moreover, LINK witnessed a morning star candle setup, highlighting a bullish outlook.
For now, any close past the POC or the wedge would see LINK contemplating a test of the trend-line resistance. If buyers accumulate adequate strength amid high volumes, Chainlink will witness further recoveries before pullbacks emerge. However, bears remaining dedicated to protecting this liquidity phase would see LINK continuing its constricted region inside the wedge before Chainlink sees a potential breakout.
Reasoning
The Relative Strength Index and price function remained in harmony in most cases. The latest bullish momentum had the RSI indicators poking pat the midline and confirmed a fading selling pressure. Moreover, the on-balance volume highlighted bullish favouritism while respecting a climbing triangle breakout. This development might open the recovery road towards the topside trend-line resistance. Furthermore, the DMI lines neared a bullish cross. However, the ADX displayed a fragile directional bias for LINK.
Final Thought
Chainlink has higher chances of breaking past the POC amid increasing buying momentum on the OBV and Relative Strength Index plus the bullish candle pattern. However, a general market sentiment outlook remains crucial to match the technical facets for profitable price action.
