Chainlink Bulls Shatter Resistance, Primed for New HighsFebruary 5, 2021
- Chainlink recently printed a new all-time high of $27.
- Now that LINK is back in price discovery mode, the technicals point to higher prices.
- If buying pressure continues mounting, this cryptocurrency could target $33.
Following an extended stagnation phase, Chainlink sliced through a critical resistance barrier that could see it rise to new record highs.
Chainlink Resumes Bull Rally
Chainlink has a year-to-date return of more than 130% after recently rising to a new all-time high of $27. Despite the significant gains incurred within such a short period, LINK is primed for another leg up.
Following a week-long consolidation period, Chainlink seems to have broken out of an ascending triangle that developed on its 2-hour chart. Moving past the $25.50 resistance level drastically increased the odds for LINK’s market value to surge by nearly 28% towards $33.
This target is determined by measuring the height of the triangle’s y-axis and adding it to the breakout point.
Despite the high probability of an upward breakout, the Tom Demark sequential indicator estimates that Chainlink could retest the triangle’s x-axis.
This technical index presented a sell signal in the form of a green nine candlestick on LINK’s 2-hour chart.
A recent spike in downward pressure appears to have validated the bearish formation. Now, LINK could retrace further before the uptrend resumes.
Sitting on Top of Stable Support
Even if sell orders continued piling up, Chainlink’s downside potential could be capped by the $24.55 support level, based on IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model. Here, roughly 9,000 addresses had previously purchased more than 4 million LINK.
Such a significant demand barrier may have the ability to contain any attempt by the bears to control Chainlink’s price action.
Indeed, holders within this range who sit “In the Money” may do everything to prevent their investments from going into the red. They may even buy more tokens to help LINK rebound to higher highs.
It is worth mentioning that at press time, Chainlink has pulled back to $25.75, which is too close to the triangle’s x-axis at $25.50. Thus, it is reasonable to believe that the TD setup’s outlook has been completed, and now LINK is bound for higher highs.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.
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