Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Chainlink’s price has risen substantially through the course of 2021. In the past week alone, the cryptocurrency saw its price hike by close to 8 percent in a 24-hour period, with renewed bullish momentum very evident on the charts. However, in accordance with past precedents, such gains only make LINK’s price more likely to see a minor correction in the near-term.
At press time, Chainlink was trading at $23.5 with a registered market cap of around $9 billion. Further, the cryptocurrency was also noting a 24-hour trading volume of $4.4 billion.
Chainlink 4-hour chart
Source: LINK/USD, TradingView
Chainlink’s 4-hour chart showed that the coin was on the verge of breaching its immediate resistance at $24.55. The few trading sessions immediately before press time saw a few failed attempts at breaching the same. If LINK is unable to go past this level, a minor dip to its immediate support at $21 seemed likely. This scenario would present traders the opportunity to short the coin and open up short positions with respect to its short-term price action.
The next level of support for Chainlink was observed to be all the way down at around $19. However, given the coin’s bullish momentum, such a steep dip was not likely to materialize.
Reasoning
The cryptocurrency’s technical indicators painted a polarizing picture to a certain degree. The MACD indicator underwent a bullish crossover yesterday, one that did not rule out the possibility that the rising Signal line may catch up with the MACD line and register a reversal in trend. Further, the RSI was heading towards the neutral zone and away from the overbought zone – indicating a decline in buying pressure for Chainlink.
Important levels to look out for
Resistance: $24.55
Support: $21, $19
Entry: $22.9
Take Profit: $21.1
Stop Loss: $24.4
Risk/Reward: 1.17
Conclusion
While Chainlink has noted significant bullish momentum over the past few days, the coin may soon note a minor price correction. This seemed likely to happen if LINK fails to breach its immediate resistance at $24.55.
Given the past few failed attempts at going past this level, there was a higher chance that there won’t be enough buying pressure to push the coin beyond it, as evidenced by the retreating RSI indicator. In such a scenario in the short-term, Chainlink looked likely to once again revisit the support level at $21.
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