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Chainlink (LINK) Nears $5 All-Time High Unfazed by Bitcoin Price Slump


Chainlink (LINK) Nears $5 All-Time High Unfazed by Bitcoin Price Slump

Bitcoin and most altcoins have yet to fully recover from last week’s Coronavirus driven meltdown but LINK bucked the trend, rallying double-digits since Feb. 25

Chainlink’s (LINK) 27.48% gain over the past four days shows that the altcoin continues to function as an outlier when compared against the recent performance of other cryptocurrencies. This strong recovery from the swing low at $3.30 to $4.79 has LINK now approaching its previous all-time high at $4.86.

Crypto market 1-week price chart. Source: Coin360

Unlike Bitcoin (BTC), LINK trading volume has shown that traders are excitedly buying each dip and the candlesticks of the past 3 days clearly show that a strong reversal has occurred.

In the daily timeframe, the moving average convergence divergence (MACD) shows a bull cross between the MACD and signal line and the histogram has recently popped above 0, a rather compelling move considering that the altcoin has already gained 26.57% since March 2.

The relative strength index (RSI) also continues to extend deeper into bullish territory, currently registering 66.

LINK USDT daily chart. Source: TradingView

As seen on Feb. 16 and Feb. 19, LINK struggled to push above $4.86 but the longer wicks on these previous two occasions show that traders took profits as the digital asset became overbought whereas in the current situation shows a candlestick with a shorter shadow, strong volume, and the MACD and RSI are strongly bullish but nowhere near overbought.

Meaning this time around, LINK may overtake its previous high at $4.86 and enter into the realm of price discovery.

LINK USDT 6-hour chart. Source: TradingView

On the shorter time frame, we can see LINK rallied after crossing above the neckline of an inverse head and shoulders pattern on March 3 and the current set up and trading volume suggest that the current rally still has strong legs.

If for some reason the market turned sour and LINK price pulled back, there is plenty of underlying support at $4.42, $4.31 and $4.11. Below $4.11, the price previously bounced at the 50% Fibonacci Retracement level ($3.27) 4 times, most recently on Feb. 26.

LINK/BTC shows strength

LINK is also showing significant strength in its BTC pair and is currently up 22.60% since the start of March and 48.9% since the marketwide correction that occurred last week (Feb. 26).

The MACD has already pulled above the signal line and the histogram shows increasing momentum as traders buy into each dip that occurs. Similar to the USD (Tether) pairing, the RSI is also situated in bullish territory, currently reading 72.

LINK BTC daily chart. Source: TradingView

We can see that simply tracking the 12 and 26 point moving averages (MA) provides sufficient signal for the LINK/BTC pair and currently the digital asset trades above both moving averages.

At the time of writing LINK/BTC is pushing into a new all-time high and traders considering booking profits should keep an eye on purchasing volume on the shorter timeframe, along with the 12-EMA as the price has ridden along this MA on each previous rally.

LINK BTC 6-hour chart. Source: TradingView

In the event that the price pulls back, traders can first watch the 12-MA, and the 23.6% Fibonacci Retracement level at 0.00047359 and below this at 0.00046279 Satoshis to 0.00043965 Satoshis which also lines up with 2 high volume nodes on the volume profile visible range indicator (VPVR).

The bottom of this range (0.00043965 Satoshis) also lines up with a double bottom on March 2 which marked the start of the current bullish reversal.

The current ascending trendline on the 6-hr chart also lines up with the 12-MA so while LINK/BTC could possibly see some profit-taking over the short-term (the RSI is beginning to roll over at 75) the uptrend remains as long as the price hold above 0.00050030 Satoshis.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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