Chainlink nears knee-jerk reaction after making new highs

Chainlink (LINK) price sees bulls being dumb, def and blind to all the dangerous market signals that have been issued this week. Instead, LINK bulls are focused on the weakness of the US Dollar that is synthetically lifting LINK/USD higher. The multi-top resistance at $7.50 has been broken, and bulls are chasing price action higher toward the R1 at $7.82, where a firm rejection is awaiting them.

Chainlink price rally on Thursday is a sick one

Chainlink price looks either unaware or untouchable for the several tail risks and warnings that have been issued or have hit the wires this week. LINK bulls are advancing and pushing price action higher, triggering some red flags on several levels. Although it looks tempting to jump in and ride this rally higher, caution should be required as there are a few big bearish elements to keep in mind.

The first element is the Relative Strength Index (RSI) in the LINK daily chart, quickly shooting higher and will soon be pointing to be overbought, limiting any upside potential. A second element is the fact that the main cryptocurrencies, such as Bitcoin and Ethereum, are all on the wrong foot, putting questions on the sustainability and reasoning behind this move. Last but not least is the strong rejection Chainlink bulls are receiving against the R1 level, which bears could use to trigger a fade on Friday that could take the price back to $7.

LINK/USD daily chart

Nonetheless, LINK bulls could still prove their thesis by triggering a daily close above the R1. Traders in doubt would get convinced by that signal, and the rally could get another boost towards $8.67 at the monthly R2, before starting to have aspirations of going towards $9.52. Do not expect a breakout just yet, seeing the big bulk of tail risks that are at hand at the moment.