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Chainlink formed a bearish engulfing candle
LINK price hit a low of $4.90 in June and has been rising since then. The rise accelerated in September and the price broke through a long-term downward resistance line the following month.. At the time of the breakthrough, she was almost 900 days old.
The pace of growth then accelerated even further, with LINK reaching a new yearly high of $17.30 two weeks ago.. However, the price has fallen since then and last week formed the first bearish engulfing candle since August.
During the decline, the token tested the strength of the long-term horizontal resistance area.
Source: TradingView
The Relative Strength Index (RSI) is showing signs of weakness as it is declining and has formed a bearish divergence (green).
LINK forecast: where is the bottom?
According to Elliott wave analysis, the most likely scenario suggests that LINK has completed a five-wave upward move that began in June. The bearish divergence that formed in November indicates that the rally is over.
Despite price weakness, cryptocurrency trader The CryptoBull is bullish on LINK's long-term trend. He wrote:
“If you are worried about the $LINK price, just place a sell order at $250, uninstall the related apps, enjoy life, come back in 1-2 years. Profit.”
Steve is also bullish because the Grayscale Chainlink Trust ($GLNK) is currently trading near $50, and he believes the LINK price will follow this trend:
“It’s like looking out a window from which you can see the future, but ignoring it. You have 2 months to prepare.”
In any case, if the wave analysis is correct, the price has started an ABC correction structure (white color). The first potential target for the bottom of this move is at $12.50, 12% below the current price, and the second is at $11.05, 23% below the price. These are Fibonacci levels of 0.382 and 0.5 corrections, respectively.
Source: TradingView
Meanwhile, LINK's break above the year's high of $17.30 would mean the rally continues. In this case, the price could rise by almost 40% to the next resistance at $20.
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