Chainlink (LINK) is one of the two cryptocurrencies that show a great correlation to the price of bitcoin with just a few days to the much-anticipated bitcoin blockchain reward halving. The other is Tezos (XTZ).
As this price analysis focuses majorly on LINK, technicals reveal that the price of LINK falls whenever the price of BTC goes down and its price rises much further whenever BTC price is rising. LINK is currently changing hands at $3.80.
As of yesterday, May 5, 2020, 02:14 +0100 UTC when the price of BTC crashed down temporarily to $8450 having only recently crossed the resistance at $9k previously, LINK was seen to show great correlation as its price fell towards the support level at $3.66.
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LINK Technical Analysis
The price of LINK has been struggling within close limits as BTC also struggles to make any movement in a specific direction.
LINK began its 24-hour price movement at $3.80 level. Afterward, the price seems to swing into a moment of retracement which saw the price correcting towards the 23.6 Fibonacci retracement level. The price dropped to $3.68 and consolidated alongside BTC for a while.
Prices are expected to be bullish in the coming days as the 200-day MA signals an uptrend. However, it is much expected to retrace successfully to the 50.0 Fibonacci level before successfully going beyond $4. LINK builds clear support levels with the $3.40-3.50 area, as the resistance at $3.85-4 remains the key level to break.
As LINK becomes range-bound, a volatile price change can be expected to occur shortly. If the price breaks above the $3.85-4 resistance level, this may trigger continuation towards the $4.60-5 areas, while a breakdown below the $3.40 level indicates weakness and likely continuation towards $2.90 and possibly $2.25-2.40.
According to the chart above, the price of LINK has found support at the previous high of $3.40. If that support level holds, it may trigger the continuation of the bullish move.
Although highly expected, if LINK breaks through the $4 mark, this may encourage a move to $4.85-5, which is equal to a breakout of Bitcoin above $9,300 since Chainlink usually follows the movements of Bitcoin.
LINK Drops 20% Against BTC In Two Weeks
The price of LINK has dropped more than 20% against its BTC pair within the last two weeks but remains strong against the USD and other pairs. This is quite explainable especially while it shows a correlation to BTC.
As BTC approaches halving, the anticipation of an inbound bull run encourages investors to show more interest in holding BTC. This definitely affects all BTC pairs, also LINK. As LINK faces a sell-off for BTC, its BTC pair shows evident weakness but remains strong against other pairs like USD.
This explains why altcoins are probably dropping in their BTC pairs while they remain relatively stable in USD. Altcoins will likely catch up to Bitcoin after the halving.
The chart is showing a potential bullish divergence on the 4-hour chart, which indicates a possible trend reversal. Bullish and bearish divergences are important indicators in determining the direction of the current trend.
Recent Updates That May Encourage A Bull Run
Recently Chainlink crypto price Oracles made their way into the Tezos ecosystem when some leading Tezos teams, SmartPy and Cryptonomicon received grants to integrate Chain Link Oracles into Tezos smart contracts. This link, according to these teams is a major prerequisite to a truly Defi ecosystem.
Also, on Tuesday, May 5, 2020, popular crypto exchange, Gemini announced that LINK, as well as few other cryptocurrencies, made it to the exchange and are now open for trading.
Trading for $DAI, $LINK, and $BAT is now open!
Welcome to the Gemini family @MakerDAO, @chainlink, and @brave
https://t.co/SnfUta0d5R
— Gemini (@Gemini) May 5, 2020
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