Hi friends, hope you are well and welcome to the new update on Chainlink (LINK).
Moved at the support of broadening formation:
The price action of the Chainlink token has formed a big broadening formation on the weekly time frame chart. The formation of this pattern was started in July 2020. If we take a look at the weekly chart, then it can be observed that whenever the price action is getting bounced from the support of this broadening formation it is reaching the resistance and forming the higher than the previous high. This time the price action has already touched the support, therefore, now the price action can start another move towards the upside to make a new high and touch the resistance again.
Rejected by $50 resistance:
On the daily time frame chart, it can be seen that after a long-term powerful bullish rally the price action of Link found resistance at $50. After being rejected by this resistance the price action has dropped at $15 support level. Now the priceline is moving between the $15 to $20 support and resistance levels for 12 days. If the Bitcoin drops more, then it is possible that the Chainlink will again re-test has the $15 support level. It is very strong support because previously it has been working as a support and resistance since August 2020.
A big bullish Cypher pattern:
While the price action is at the support of a broadening formation on the weekly time frame chart, at the same time the price action of LINK has formed a bullish Cypher pattern. There are also 50 simple moving average support in the buying zone and 100 SMA below the buying area.
The buying and sell targets as per the Fibonacci sequence of this Fibonacci based pattern are as below:
Buy between: $23.65 to $16.78
Sell between: $29.04 to $42. 01
The maximum extent of the potential reversal zone $16.78 can be used as stop loss. As per the above targets, this trade has a big profit possibility of 150%, and the loss possibility is 30%.
It is very positive in gesture, that while the price action is at the support of the broadening formation at the same time it has completed the bullish harmonic move. Yes, it is possible that if the Bitcoin drops, then priceline of Link can again test the support. However, from the potential of this big Cypher, the price can move up and can set a new high.
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