Chainlink price eyes 30% gains as cryptos stage a recovery rally

Chainlink (LINK) price has followed the Bitcoin cue, rising by a commendable margin on the day in tandem with BTC. This bullish momentum comes as investors gaze on the supply zone, hoping to ship LINK to a range with greater selling potential at a relatively overbought price.

Also Read: Chainlink price rallying by 6% might act as relief for the 78% of LINK holders facing losses

Chainlink price to climb to the selling zone

Chainlink (LINK) price has been trading with a bullish bias since May 28, when the Parabolic SAR flipped below the price. The bullish takeover followed a 10% rally beginning May 26, throwing the bears off course. The altcoin has directional bias with the intention to head north, but it would take more than just intention to facilitate the uptrend.

Chainlink (LINK) price has turned bullish after Bitcoin (BTC) restored above the $27,000 range. Despite accumulating overhead pressure presented by the 50-, 100-, and 200-day Exponential Moving Averages (EMA), a newly found momentum could see the altcoin enjoy the weekend rally.

An increase in buying pressure from the current level could see LINK shatter above the $6.96 resistance level, flipping all the key EMA resistance levels into support and using them to jump off base to target new highs.

In such a case, a crucial supply zone presents an opportunity for LINK holders to sell at a premium value. A supply zone trading strategy uses the price returning to the highlighted zone as an exit criterion. As such, traders should watch for a retest of the zone marked in blue to sell their LINK holdings. It marks the distribution phase of Wykoff’s classic schematic of market action characterized by accumulation, distribution, and redistribution spaces.

According to Wykoff, these phases are the handiwork of ‘whales’ and big institutions like smart money hedging their funds in the market. Once Chainlink price tags the supply zone, investors should expect a pullback, making time an important factor in avoiding the load-shedding exercise.

The recommended stop-loss level where traders and investors can lock in profits while avoiding any losses is the lower boundary of the supply zone at around $8.17. Such a moe would constitute a 30% rise from the current level. 

LINK/USDT 1-Day Chart

On the other hand, an increase and sustained bullish momentum could turn what now presents as a supply zone into a breaker, providing an opportunity for Chainlink price to ascend and collect liquidity above the November highs of around $9.00.

The Relative Strength Index (RSI) movement, which suggested growing momentum, supports this bullish outlook. The Awesome Oscillators drawing toward the midline corroborates this.