The Chainlink (LINK) price, after reaching a new yearly high on November 11, embarked on a retracement journey, prompting speculation on whether the recent higher low on November 22 signals the initiation of another upward movement.
Analyzing the weekly timeframe, the LINK price demonstrated an impressive breakout from a 500-day horizontal resistance area in October. The subsequent surge saw four consecutive bullish weekly candlesticks, culminating in a new yearly high of $16.60, marking a remarkable 130% increase in just four weeks. However, the positive momentum encountered a roadblock last week, as LINK created its first bearish weekly candlestick since the breakout.
Technical analysts are closely monitoring the Relative Strength Index (RSI), a key momentum indicator, to gauge market conditions. While the RSI is on an upward trajectory and above 50—indicating a positive trend—it also resides in overbought territory, adding a layer of complexity to the market sentiment.
Notable voices in the cryptocurrency space express bullish sentiments. Analysts highlight factors such as excitement for the V0.2 launch and staking, expanding utilities post-migration, and the anticipation of price discovery beyond $20. Bitcoin Scoop points out the building liquidity below the price, potentially fueling an upward movement.
Tony Bitcoin identifies a descending wedge pattern and anticipates a breakout triggering a sharp upward movement. Furthermore, the priority migration for Chainlink staking V0.2 on November 28 adds another layer of anticipation to the market dynamics.
Daily timeframe technical analysis, incorporating the Elliott Wave theory and RSI readings, paints a bullish picture. The Elliott Wave count suggests a corrective wave four, likely taking the form of a triangle consolidating above the $12.50 support level. Hidden bullish divergence in the daily RSI indicates a potential trend continuation.
The optimistic outlook envisions a target of $19.50 for the top of wave five, representing a 33% increase from the current price. Confirmation of this trajectory would come with a breakout from the triangle pattern.
Despite the positive predictions, it is crucial to acknowledge the potential for a 30% drop if LINK descends below the $12.50 support level, triggering a retreat to the 0.618 Fib support at $10. As LINK navigates peaks and valleys, the crypto community awaits the unfolding events, mindful of the intricate dance between technical indicators and market sentiment.