Chainlink price to provide a buying opportunity before LINK rallies 50%
- Chainlink price seems to be at the end of its short-term upswing and is likely to retrace to $20.
- This downswing could provide a buying opportunity before LINK triggers a 50% upswing to $33.08.
- A breakdown of the range low at $19.05 will invalidate the bullish thesis.
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Chainlink price set up a higher high in its recent run-up, effectively collecting liquidity resting above the previous swing high. This move seems to have reached its climax so investors can expect LINK to undergo a minor retracement before it musters up the momentum to trigger another leg-up.
Chainlink price reveals its ambitious plans
Chainlink price rallied 47% over the past 20 days and set up a swing high at $25.47. This run-up allowed LINK to collect the buy-stop liquidity resting above the December 27 swing high at $24.50. Therefore, market participants are likely to book profits, triggering a descent to the 70.5% retracement level at $20.95.
In some cases, the said retracement could come after Chainlink price sweeps the December 1 swing high at $26.93. Either way, LINK will the brief correction will serve as a buying opportunity for the sidelined buyers.
The uptrend that originates after this minor pullback will allow Chainlink price to slice through $25.48 and fill the fair value gap (FVG) extending from $30.47 to $33.08. This leg-up will constitute a 50% ascent from the $20.95 support level.
LINK/USDT 4-hour chart
Supporting the brief retracement is the whale transaction count worth $1 million or more. A spike in these transfers often indicates that investors are booking profits and are likely to be followed by a retracement in the assets price.
On January 3, whale transactions spiked to 34, suggesting that a correction is around the corner.
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LINK whale transactions
IntoTheBlock’s Global In/Out of the Money (GIOM) model shows that $30 is the only meaningful hurdle that is present in Chainlink’s path. Here, roughly 88,760 addresses that purchased 38.79 million LINK tokens are “Out of the Money.”
LINK GIOM
While things are looking up for Chainlink price, an increased selling pressure that pushes LINK to produce a four-hour candlestick close below the range low at $19.05 will create a lower low, invalidating the bullish thesis. In this case, LINK could retrace to the $17.26 support level.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
