Chainlink Shatters 238-Day Pattern – Wave Count Signals 100% LINK Price Increase

Key Takeaways

• Chainlink (LINK) broke out from a long-term parallel channel.
• LINK created a bullish, engulfing candlestick last week.
• Has the LINK price finally completed its long-term correction?

Chainlink’s price increased over 30% last week, creating a bullish engulfing candlestick and breaking out from a long-term descending parallel channel. Since the yearly high, the channel has existed, so its breakout is a positive sign.

LINK reached a 152-day high on Nov. 12 but fell afterward and is currently attempting to regain its footing. Let’s analyze the LINK price action and see where the closest support levels are and what the long-term breakout entails.

LINK Price Breaks Out

The weekly time frame chart shows that LINK broke out from a descending parallel channel last week by creating a bullish, engulfing candlestick (white icon). The channel existed for 238 days before the breakout.

Besides the channel, LINK also moved above the $13 horizontal area. This is a critical horizontal level since it has acted as support and resistance since November 2023. The next resistance is at $18.30, the final one before the yearly high.

Technical indicators validate the breakout and suggest the upward movement will continue. The Relative Strength Index (RSI) broke out from its bearish divergence trend line (green) and moved above 50.

The Moving Average Convergence/Divergence (MACD) made a bullish cross (black) and is increasing, though it is not positive yet.

Therefore, the weekly time frame price action and technical indicators suggest Chainlink’s upward movement will continue.

Why is LINK Trending?

Chainlink is trending today, though not for something related to the actual LINK. Rather, another project called LINK on SOL has been created and is surging shortly after its launch . Opinions on the move are divided, with some thinking this is a bad decision that will harm  current and future investors.

The new LINK may have been created after Trump-supported World Liberty Financial announced that it would embrace  the Chainlink standard to accelerate its adoption. Chainlink will secure WLFI’s lending market and provide other network capabilities.

Both Donald Trump Jr.  and Eric Trump  shared the news.

Positive Wave Count

The weekly time frame wave count is also positive, implying that LINK has started a new five-wave upward movement (white). If so, it is nearing the top of wave one or has already started wave two. According to the count, the movement inside the channel is a completed A-B-C corrective structure (black).

It is still unclear if the ongoing increase is part of a longer-term wave three or is wave C in an A-B-C structure. In any case, it will likely have at least the same length as the preceding upward movement.

If so, the wave count gives a target of $26.14, a 100% increase from the current LINK price.

The short-term count implies the correction is almost complete. After completing a five-wave increase starting on Nov. 4, LINK started an A-B-C correction (black), which might be over. Wave C has taken the shape of a descending wedge, meaning it is an ending diagonal, confirming the corrective structure.

Since waves A and C are nearly the same length as LINK, which has reached the 0.5 Fibonacci retracement support level, the correction may be over. While LINK may fall to the 0.618 Fibonacci retracement support level at $12.06, the correction will likely end soon.

Afterward, the LINK price can continue its increase toward the long-term target of $26.14. The reaction there will determine the long-term trend.

Chainlink Highs Head

Chainlink news regarding its adoption by WLFI and creating a new LINK on SOL has caused LINK to trend today. The Chainlink price broke out from a long-term channel, and the wave count implies that an upward movement toward $26.14 could occur.

The LINK price correction is likely over.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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