Can Chainlink (LINK), a cryptocurrency founded on Oracle solutions and potential applications in decentralized platforms, withstand a further dip before mounting another rally? Chainlink needs to trend lower before another rally, according to an analysis by Michaël van de Poppe, a renowned market analyst and founder of MN Trading. Here’s why.
Understanding the Current Chainlink Scenario
Chainlink, currently facing substantial resistance slightly above the $8 mark, may need to tread lower before it can ascend again. This prediction, shared with Poppe’s substantial Twitter following of over 663,200, suggests that LINK may need to revisit the $7.06 mark, or even drop as low as $6.20, before any significant upswing.
A key concept in this prediction is the notion of a ‘higher low’, a situation where a cryptocurrency’s price hits a new low that’s higher than the previous one, without a lower low interrupting this pattern. Often, this price movement precedes a bullish run.
The Potential for a Chainlink Rally
Despite recent price fluctuations raising doubts about LINK’s ability to break through the critical barrier above $8, there’s potential for an upward trend. This depends largely on whether the bulls view $6.79 as an entry zone. If so, a demand surge could push LINK towards a retest of the $7.06 mark, potentially initiating an upward trend.
However, On-Balance-Volume (OBV) indications suggest that LINK may still face selling pressure. In fact, if LINK’s price plunges to $6 or $6.20, it could be the entry point that triggers a sustained rally, depending on the resolve of the bulls to defend the $6 mark or leave it to the bears.
Indicators to Consider
The Directional Movement Index (DMI) and Average Directional Index (ADX) are key indicators to consider. Currently, the +DMI (green) stands at 7.26 while the -DMI (red) is significantly higher at 35.21. This large difference suggests that sellers are in control, which is typically a sell/weak signal. Moreover, the ADX (yellow) is at 42.06, indicating a strong downward trend.
Given these indicators, LINK has the potential to fall below $6.20. However, this could also provide an entry opportunity for traders seeking short-term gains.
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Remember, while analysis can guide your decisions, always conduct your own research and exercise due diligence when trading in cryptocurrencies. The cryptocurrency market is volatile, and any actions you take are strictly at your own risk.
