Chainlink (LINK) Shows Signs of Rebound After Stabilizing Above $18

Key Takeaways

• Descending wedge formation, signaling a potential bullish reversal.
• Major Fibonacci retracement support holding at $18.00.
• RSI divergence suggests a shift in momentum.

Chainlink (LINK) has been consolidating after a significant correction from its previous highs.

The 4-hour chart indicates the completion of a five-wave Elliott Wave impulse, followed by an extended corrective phase.

The market is now at a key decision point, with the potential for either a breakdown or the start of a new bullish cycle.

LINK Price Analysis

The 4-hour chart highlights a completed five-wave Elliott Wave structure, peaking at $30.80 on Dec. 16 before entering a prolonged corrective phase.

The correction unfolded in a WXY pattern, with the final wave finding support on Feb. 3, slightly below the 0.618 Fibonacci retracement level at $16.

A descending triangle formation has emerged, often a bullish reversal signal. The price has tested this pattern’s lower boundary multiple times, with buyers stepping in at each interaction to prevent further downside.

The 4-hour Relative Strength Index (RSI) indicator shows a bullish divergence. The price made lower lows while the RSI made higher lows, suggesting weakening bearish momentum.

If LINK successfully breaks out of the descending triangle, the first resistance level is $20.45 (0.5 Fibonacci level), followed by stronger resistance near $22.89 (0.382 Fibonacci retracement).

A breakout above these levels could confirm the end of the correction and initiate a new impulsive wave.

However, if LINK fails to hold above $18, a retest of the 0.786 Fibonacci level at $14.53 remains possible before any recovery.

LINK Price Prediction

The 1-hour chart provides a detailed short-term Elliott Wave count, suggesting that LINK has completed a corrective wave (ii) at $17.47 and is primed for an impulsive wave (iii) upward.

The immediate resistance lies at $20.45, coinciding with the 0.5 Fibonacci retracement level.

If wave (iii) extends as expected, the targets lie at $23.51 (1.0 Fibonacci extension) and $25.15 (1.272 Fibonacci level), with further extensions reaching $27.24 (1.618 Fibonacci level).

A healthy wave (iv) retracement could bring LINK back to support around $23.51 before a final leg higher in wave (v), potentially reaching $29.55 or higher.

On the bearish side, a failure to maintain the $18 support level could invalidate the bullish scenario, leading to a retest of the lower Fibonacci support at $14.53.

The RSI remains neutral, suggesting that the breakout direction is yet to be confirmed.

Given the current chart structure, a breakout above the descending wedge pattern is the most likely outcome, with Fibonacci targets providing a roadmap for the next potential rally.

Key Levels to Watch

• Immediate Resistance: $20.45 (0.5 Fibonacci retracement).
• Key Support: $18.00 (0.618 Fibonacci retracement).
• Critical Support: $14.53 (0.786 Fibonacci retracement).
• Short-Term Target for Wave (v): Above $29.55 if momentum sustains.
• Invalidation Zone: Below $14.00, signaling further downside potential.