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LINK Price Falls 8% After Rejection – Bullish Trend Valid if Chainlink Stays Above $17

Last Updated June 4, 2024 2:21 PM
Valdrin Tahiri
Last Updated June 4, 2024 2:21 PM

Key Takeaways

  • The Chainlink price decreased after a rejection by a Fib resistance on May 29.
  • LINK has traded 23% below its yearly high of $22.85 reached on March 11.
  • Is the LINK price still correcting, or has it begun a new upward movement?

LINK has increased over 50% since bouncing on April 13 but has not cleared its main resistance area yet. Rather, the Chainlink price has fallen since a rejection on May 29.

The price trades between important horizontal and resistance areas. So, the critical question is which will break first. If the price moves above resistance, it can quickly increase to a new yearly high. Conversely, a breakdown will mean a drop to the yearly lows is likely instead.

Chainlink Price Falls After Rejection

The daily time frame Chainlink price analysis shows an ongoing increase since April 13. At the time, LINK had fallen to a low of $11.78. After creating successive higher lows, LINK broke out from a descending resistance trend line on May 16. The upward movement led to a high of $19.22 on May 29.

The Chainlink price has fallen since, catalyzed by a rejection from the 0.618 Fibonacci retracement resistance (red circle). Nevertheless, LINK  still trades above the $16.80 horizontal area, which is now likely to provide support. So, the price action shows that the LINK price trades above horizontal but below Fib support.

Chainlink Price Rejection
LINK/USDT Daily Chart | Credit: TradingView

Technical indicator readings are mixed. The MACD is above 0, but just made a bearish cross (red icon) and is trending downward. Similarly, the RSI is above 50 but trending down. So, the price action and technical indicators are both undecided, failing to verify the trend’s direction.

Is The LINK Trend Bullish?

While the daily time frame price analysis is undetermined, the shorter-term six-hour chart is more bullish. The reason for this is that the LINK price has broken out from an ascending parallel channel that contained the increase since April. The breakout is a sign the movement is impulsive rather than corrective.

After breaking out, LINK validated the channel as support and resumed its increase. Moreover, there is a completed five-wave increase, further implying the increase is impulsive.

This bullish hypothesis will be confirmed if LINK closes above the 0.618 Fibonacci retracement resistance at $18.64.

LINK Price Wave Count
LINK/USDT Six-Hour Chart | Credit: TradingView

In that case, the wave count will imply that the price is in the fifth and final wave of an increase (white) that started with the recovery after April 12. A likely target for this increase is at $23, created by the 2.61 extension of wave one (white). This will be a new yearly high.

Despite this bullish LINK price prediction, closing below the channel’s resistance trend line will put the impulsive increase in doubt. Then, LINK could fall to the channel’s support trend line at $14.

Bullish Sentiment Valid Above $17

Despite Chainlink’s substantial recovery since April, the future trend’s direction is still unclear. The trend leans bullish as long as the price trades above the confluence of supports at $17. The breakout from a parallel channel and wave count also lean bullish, predicting a new yearly high in June.

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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