ChainLink (LINK) is trading in the midst of a pattern that has been forming since July 2021. Whether it regains the centerline or is rejected could determine the direction of the next move.
Ascending parallel channel
LINK has been on the rise since July 20 when it bounced off a low of $ 13.38. The upside movement hit a high of $ 38.31 on November 10th. This move confirmed the resistance line of the ascending parallel channel (red symbol) that hosts the entire price move.
On December 4th, the token rebounded after hitting a low of $ 15.32, creating a long wick underneath (green symbol). This is seen as a sign of pressure to buy. LINK has grown since then.
It is currently trading right on the center line of this parallel channel. Whether it is reclaimed or rejected and falls will likely determine the direction of the long-term trend.
USDT chart | Source: TradingView
Technical indicators
Despite the rejection, the daily time frame technical indicators are still bullish.
The MACD, formed from the short-term and long-term moving averages (MA), has entered positive territory. This means that the short term MA is faster than the long term MA and that is a sign of an upward trend.
Likewise, the RSI, a momentum indicator, has moved above 50 (green symbol). This also counts as a sign of an upward trend.
USDT chart | Source: TradingView
Therefore, the most likely scenario is that LINK will find short-term support, hit a higher low and then resume the uptrend.
In this case, the next support is between 20.4-22. This is the fib retracement support at 0.5-0.618 and also coincides with the ascending support line.
USDT 4-hour chart | Source: TradingView
Count waves
Trader @Altstreetbet tweeted a LINK chart stating that the token is expected to rise to $ 43.5.
The source: Twitter
The most likely wavenumber shows that LINK is in wave C of an ABC correction. Wave B (highlighted) is standard, with both dips having a ratio of 1: 1.61 (black), which is common with such structures.
The target, which will likely act as the tip of the move, is $ 38 and $ 52, which would equate to A: C waves 1: 1 and 1: 1.61 (white).
USDT chart | Source: TradingView
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