Will a bullish recovery in Chainlink result in an explosive rally to $30 for a new swing high as the broader market recovers?
As Bitcoin BTC $68 888 24h volatility: 1.1% Market cap: $1.38 T Vol. 24h: $39.32 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 $8.81 24h volatility: 2.4% Market cap: $6.25 B Vol. 24h: $342.52 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?
LINK Price in a Wedge Aims at a Breakout Run
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.
Massive Offloading by Chainlink Whales in 7 Days
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.
Will Chainlink Breakout Rally Reach $30?
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.
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