Chainlink (LINK) is currently trading above a key horizontal support level. The direction of the longer-term trend may be determined by whether it breaks down or continues to bounce back.
After hitting a low of $15 on December 4, LINK rebounded. The bounce was critical since it resulted in a greater low than the price in July.
It also confirmed the $19.20 area as a strong support.
With the exception of the deviation (red circle) in July, this is a critical area because LINK has been trading above it since the beginning of 2021.
As a result, a break below this support level could indicate that the market is in the midst of a longer-term decline.
Lower time periods yield a mixed picture.
The MACD and RSI are both advancing, therefore technical indicators in the daily time period are largely bullish. The latter is practically positive, while the former is above 50. That’s, frequently considered a harbinger of bullish trends.
LINK has also recaptured the $23 horizontal area after breaking out from a declining resistance line.
Since its lows on December 4, LINK has been trading inside an upward parallel channel on the four-hour chart. This type of channel is usually regarded as a corrective pattern. Thereby, implying that it will eventually break down.
LINK is currently trading slightly above the channel’s midpoint (green circle). A drop below the midpoint would prove this.
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