Will a bullish recovery in Chainlink result in an explosive rally to $30 for a new swing high as the broader market recovers?
By Vishal Dixit
Edited by Julia Sakovich
Updated
3 mins read
As Bitcoin BTC $97 557 24h volatility: 1.4% Market cap: $1.93 T Vol. 24h: $48.16 B blasted through the $96,000 mark with a 5.87% recovery in the past 24 hours, the crypto market has gained a newfound momentum. Amid the recovering stance, Chainlink LINK $18.85 24h volatility: 0.2% Market cap: $12.02 B Vol. 24h: $734.92 M has increased by 8.64% in the last 24 hours.
Despite the significant recovery, it remains under the $20 milestone with a market cap of $12.68 billion. With a potential breakout on the horizon, will Chainlink re-challenge the $30 swing high?
In the 4-hour chart, the LINK price action reveals local resistance and support trendlines. These trendlines are converging to make a potential falling wedge pattern.
Currently, the Chainlink price action bounces off from the support trendline, hinting at a new positive cycle within the wedge. The bounce-off comes from the $18 psychological support and has reclaimed the broken zone at $19.35.
Currently, the Chainlink token is trading at $19.85 and is challenging the 50 EMA line in the 4-hour chart. The dynamic resistance breakout could signal a buying opportunity.
Over the past 7 days, the Chainlink balance by holdings in US dollars has witnessed a massive difference. On January 6, the balance by holdings stood at $23.82 billion. However, it has now declined to $19.13 billion.
The majority of the shift has come in the whale holdings. The holdings of more than $10 million are now at $13.98 billion compared to $17.68 billion 7 days ago.
Similarly, the $100,000 to $1 million worth of holdings has changed from $1.56 billion to $1.27 billion. Meanwhile, the $1 million to $10 million holdings have changed from $2.82 billion to $2.35 billion over the past 7 days.
As the offloading among the whales has increased over the past week, the chances of a strong bullish move in Chainlink are questionable. However, with the broader market recovery gaining momentum, Chainlink holds significant potential to reclaim bullish traction.
On a bullish note, the last two lows at the $19.35 supply zone and the $18 psychological mark reveal a bullish divergence in the RSI line. This increases the possibility of a recovery rally.
As the uptrend within the falling wedge continues, the Chainlink token is likely to challenge the overhead trendline.
The trendline is in confluence with the $21.78 resistance zone and the $200 EMA line. Hence, the bulls are likely to face a massive supply overload if the uptrend continues.
Considering the broader market recovery gains momentum, a bullish breakout in Chainlink is likely to challenge the next resistance levels at $26.10 and $30.73.
On the flip side, the crucial support for Chainlink remains the $18 mark and the local support trendline.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Vishal, a Bachelor of Science graduate, began his journey in the crypto space during the 2021 bull run and has since navigated the subsequent market winter. With a strong technical background, he is dedicated to delivering insightful articles rich in technical details, empowering readers to make well-informed decisions.
