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Chainlink Breaks Resistance and Continues Soaring — What’s the Year-End Forecast for LINK?

Published October 23, 2023 10:23 AM
Nikola Lazic
Published October 23, 2023 10:23 AM

Key Takeaways

  • LINK rose by over 50% from October 20.
  • A significant breakout occurred after a horizontal range spanning 528 days.
  • A previous projection was accurate and another more upside is now expected.
  • The price is likely to cool off in the short-term.

In May 2022, LINK experienced a significant drop, falling below the $9 mark and ultimately stabilizing at around $5.40. This created a horizontal trading range, with these price levels serving as its boundaries, following its sharp decline from an all-time high of nearly $56.

Numerous attempts were made to break out of this consolidation zone, but none proved sustainable. However, on October 22, there was a noteworthy shift as LINK’s price finally breached the $9 resistance, rising to $11 today.

After spending 528 days in this range and with the recent breakout, the question arises: Has LINK concluded its accumulation phase and embarked on a sustained upward trajectory?

LINK Price Analysis

On June 10, 2023, LINK’s price experienced a significant drop, reaching a low of $4.75, marking the lowest point in the ongoing bearish phase. However, by June 22, it had rebounded back into its previous trading range, indicating a potential accumulation of liquidity for a bullish upswing. This upward momentum pushed the price to a peak of $8.3, but it was followed by a three-wave corrective pattern, leading it to retreat to $5.80 by August 17.

In our previous LINK analysis from September 28, we interpreted these price movements as the first two waves of a potential five-wave impulse.

Starting impulse?
Starting impulse?

Based on this analysis, we’ve been anticipating a breakthrough of the $9.20 resistance, paving the way for a sustained bullish trend:

“In this scenario, the recent surge observed since the end of August may well represent the third wave of this upward trajectory, with an ultimate target exceeding the $9.20 resistance level.”

Our projection for the subsequent bullish phase set a target at $13.8, determined by the 1.618 Fibonacci extension, which suggests the ideal price trajectory for wave 3.

Upon reviewing the current daily chart, it’s evident that the price has reached a new annual high, surmounting the crucial horizontal resistance and maintaining its bullish momentum, despite some minor signs of wavering today.

Breakout made
Breakout occurred, as shown in the chart

This projection aligns seamlessly with our earlier forecasts. The surge finds support in a substantial increase in trading volume, surpassing the usual levels and resembling the July 20 volume, the date of the previous significant peak.

However, a word of caution is in order. The RSI has climbed to 80%, indicating that the asset has entered overbought territory, suggesting a potential overextension. Nonetheless, considering the remarkable 50% price surge since October 20, this RSI level should come as no surprise.

In the short term, we anticipate a pullback to the $9.20 level as the price tests the former resistance, which is likely to act as new support during the fourth wave of the current cycle. If this resistance indeed becomes support, as highly likely, we can anticipate a subsequent bullish phase targeting $13.80.

But this may not signify the culmination of the bullish trend. If we are witnessing the initiation of a more extensive five-wave impulse, the ultimate price target could approach just short of $20.

Conclusion 

Our previous analysis had forecasted this bullish trajectory, and the recent price developments closely mirror our predictions. The daily chart reveals a substantial surge in trading volume, while the RSI signals a potential state of overbought conditions, implying a likely short-term retracement.

Nonetheless, if LINK successfully establishes firm support around the $9.20 level, we might be witnessing the initial phases of a more extensive bullish trend. This could lead to potential price targets of $13.80 by year-end and possibly extending as high as $20 in the early stages of the following year.

Disclaimer

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

 

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