On Minor Pullback, Chainlink Sees Double Bottom Reversal to Trigger Breakout Rally. Will Uptrend Reach $12.49?
Amid increased market liquidations and high volatility in the DeFi space, Chainlink is preparing for a trend reversal. The underlying sentiment is predicting a rebound from $10.85. Is this the best dip to buy?
Bulls Return to Chainlink
On the 4-hour chart, after the triangle breakout, Chainlink’s recovery rally continued and reached $12.50. The recovery run, which started from $8.47 in early August, peaked at $12.49, representing a 47% jump in price.
The recovery comes after a significant drop from $13.90 to the lower support at $8.47. Based on the Fibonacci levels retracements during the correction phase, the 78.60% level at $12.49 remains a critical resistance level.
The recent pullback from $12.49 is forming a small trendline resistance. Chainlink is currently showing a consolidation phase between the 50% and 61.80% levels at $10.85 and $11.50, respectively.
Moreover, the 4-hour price action points to a potential double bottom reversal that may challenge the recently formed resistance line.
The daily RSI line shows a massive bullish divergence between the two bottoms at the 50% Fibonacci level, reflecting high odds of an uptrend. Meanwhile, the MACD indicator supports breakout chances as it prepares for a bullish crossover.
Blockchain Bulls’ Influence Grows
In terms of on-chain performance, IntoTheBlock data shows that 57.51% of Chainlink’s supply, consisting of 575 million LINK tokens, is in the money. This means that profitable holders own $6.39 billion worth of LINK tokens.
Meanwhile, 37.60% of the volume, representing 376 million LINK tokens, were purchased at higher prices. These tokens represent $4.81 billion and are out of the money. In addition, 48.88 million LINK tokens were purchased between $10.57 and $11.72, currently at breakeven points, representing 4.89% of the total volume.
The Chainlink network shows high fluctuations in the number of recent transactions and their volumes. Over the past seven days, the number of transactions has dropped from 99 to 77, with a seven-day high of 127 and a low of 66.
The volume of these transactions has decreased significantly over the past seven days, from 6.72 million to 1.95 million LINK tokens.
Will Chainlink Reach $12.49?
Chainlink price is showing two consecutive bullish candles, which represents a 1.50% price surge and forms a morning star pattern. With a potential bullish breakout, the uptrend could find resistance at 61.80% and 78.60% levels at $11.50 and $12.49, respectively.
After the breakout, the uptrend may reach a peak of $13.90 or a resistance level of $16.76. On the downside, the support levels of 38.20% and 23.60% are at $10.23 and $9.52, respectively.
