Chainlink price rebound to consolidate, as LINK is locked in a corner

  • Chainlink price strength puts bulls back on the bandwagon.
  • LINK/BTC ratio shaping a bullish cup-with-handle pattern.
  • IOMAP data reveals 74% of addresses are in the money, offering a firm source of support.

Chainlink price has rebounded to the descending channel’s upper trend line, wedging LINK into a corner just above the top of a price congestion range that began in February. Upside may be limited in the short-term as the altcoin consolidates in a tight range, but there is a high probability that the current situation will resolve to the upside.

Chainlink price bolstered by on-chain metric 

A close look at the Intotheblock In/Out of the Money Around Price (IOMAP) data exposes a large number of in-the-money addresses beginning at $34.69 and extending down to $30.38, positioning LINK to withstand any short term selling pressure comfortably.

The 66.92k addresses owning 65.24 million LINK stands in contrast to the marginal amount of out-of-the-money addresses, putting Chainlink price in an optimal position to absorb some selling before quickly breaking through the descending channel’s upper trend line.

LINK IOMAP data

LINK IOMAP data

LINK/BTC price pattern points to a window of opportunity for Chainlink speculators

Relative strength is fundamental to generating alpha, and how a cryptocurrency trades against BTC reveals when those windows of outperformance may emerge. Currently, LINK/BTC is shaping the handle of a bullish cup-with-handle pattern on the daily chart. If the pattern resolves to the upside and based on the measured move target, LINK will outperform BTC by almost 50% in the coming weeks or months.

It is not a far-fetched outlook for LINK/BTC considering the breakneck speed of projects adopting LINK’s decentralized oracle network to provide input on various external sources of data.

LINK/BTC daily chart

LINK/BTC daily chart

Chainlink price at a pivotal threshold in the road to overcoming topside trendline

A quick review of the 12-hour chart below emphasizes the delicate position of LINK in the charts. The digital token has been forced into a corner by the upper range of price congestion and the channel’s upper trend line.

Using the on-chain metrics mentioned above combined with the chart’s technicals, it is possible to deliver a mildly bullish outlook for Chainlink price, but maybe after some consolidation.

Resistance begins at the channel’s upper trend line at $37.19, followed by the 261.8% Fibonacci extension of the August-September 2020 correction at $40.53. The significant resistance is at the topside trend line beginning in 2019 and running through 2020 high, and most recently, the February high. It currently sits at $46.30, just below the 161.8% extension of the February crash at $46.76.

LINK/USD 12-hour chart

LINK/USD 12-hour chart

With the IOMAP data showing broad support down to $30.38, LINK should not decline beyond the intersection of the 50% retracement of the February crash at $32.68, the channel’s midline at $32.06, and the 100 twelve-hour simple moving average (SMA) at $31.87.

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