Link Finally Breaks Out From 52 Day Resistance Line (TA - 14th of October)

By 0xJonnyDee | My Technical Analysis | 14 Oct 2020


On Oct 8, the ChainLink (LINK) price broke out from a descending resistance line that had been in place for 52 days.

While a short-term decline could occur, the price should resume its upward move afterward.

 

LINK Breaks Out From Resistance

The LINK price has been moving downwards since it reached a high of $20.71 on Aug 17. The fall followed a descending resistance line and continued until the price reached a low of $7.28 on Sept 23. LINK has been increasing since.

On Oct 9, the price broke out from this resistance line and continued moving upwards until it broke out above the $9.80 resistance area a few days later. Currently, it is in the process of validating this area as support.

If the price continues to climb, the next resistance area would be found at $13.20. Conversely, a breakdown could take the price all the way down to $7.30.

 

bd4a0b09aa8bb268c40b3917035bb73441169f5604521e52d96c5b940bdb13d0.png

 

Bullish Indicators

Technical indicators are bullish and support the previous rally towards resistance.

  • The MACD has just crossed into positive territory.
  • The RSI has crossed above 50.
  • The Stochastic Oscillator has made a bullish cross.

Therefore, while the price is expected to move towards $13.20, a look at lower time-frames is required to determine how it will get there.

 

cb18f66cd50435927cbb25fa37f8b191dab1c830bee053726bbfe5957bfd5a59.png

 

The 2-hour chart shows a breakout from and re-test of the $10.80 area, which previously rejected the price on Sept 26 – 28. The RSI formed bearish divergence, and the price fell afterward as a result, validating the $10.80 area as support and creating a long lower wick.

If the price manages to hold on above this level, it should increase towards $13.20, while a failure to do so would take the price towards the closest support area at $10.12.

If the price falls below the $10.80 area and fails to reclaim it afterward, it would be a major bearish development since the previous breakout would be considered a deviation above the range high. That would mean the price is likely to continue falling.

However, that doesn’t seem likely at the current time.

 

38bbfb0df46716bbae4ee0602732c519308da74cb94a1ccc015d31334fb864d8.png

 

Wave Count

Since the Aug 17 high, the LINK price has possibly completed a bearish leading diagonal (shown in black below), which could have been the A wave of an A-B-C correction (in orange), currently in the B wave.

The B wave is also taking place inside an A-B-C structure (black), and the price is currently in the C wave.

The most likely targets for the top of the C wave are near $12.20 and $13.30 – $13.70, found by the Fib levels of the long and short-term wave A.

 

383b514ef250cb0a4bdc897e0fd457c8184a2dcd5b3db2e512af12cc6a5d37d1.png

 

A closer look at the C wave reveals that the price has completed sub-waves 1 – 4 (shown in blue below) and is currently beginning wave 5.

Therefore, unless wave 5 is extremely short, the $13.30 – $13.70 area is more likely to act as the top.

 

20667501799e397a7705aba6a9af79eb856ff91f9650ee01c61a2b3081967ed5.png

 

To conclude, the LINK price should rally towards the closest resistance area before possibly falling to new lows.

 

What do you think we will see in the coming week / month? If you like this content, consider tipping the article / following me, so more people see this content and we get a nice discussion going on. 

Also, If you are interested in trading, I would suggest you try out BeInCrypto's free Telegram chat. I am there and it is growing very quickly (over 7,900 members) where they discuss the market and share interesting content. They also have a free premium channel where they have a cryptocurrency trading course and daily trading signals. If you are interested, you can click here.

Until next time, stay classy crypto world!

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0xJonnyDee
0xJonnyDee

A Crypto Marketing Wizard with over 7 years experience. Former Marketing Manager at CoinMarketCap. Feel free to get in connect with / content me on - Twitter - https://twitter.com/0xJonnyDee


My Technical Analysis
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