Chainlink experiences a retreat from its yearly high
Following a strong upward trend since October, LINK recently reached a new yearly high of $17.32. However, this week’s price action displayed bearish characteristics, with the formation of a third bearish engulfing candle in the overall upward movement.
Source: TradingView
While the Relative Strength Index (RSI) remains above the neutral level of 50, it has begun to fall and recently dipped below 70 (red), indicating declining momentum.
Insights from analysts
Several cryptocurrency traders and analysts on Platform X hold the belief that LINK will continue to grow. For instance, SteVe noted that after successfully breaking through a key long-term resistance, the price is expected to reach a historical maximum.
Weekly chart LINK/USDT. Source: X
RektCapital shares a similar opinion, stating:
“Chainlink made a bullish breakout from the pattern, now we need to retest its top to fully confirm the breakout.”
Additionally, InmortalCrypto identifies a bullish signal in a short-term deviation below the bottom range, followed by a subsequent price recovery.
LINK forecast: when will the correction end?
According to Elliott wave analysis, it is likely that LINK is currently in the fourth wave of a five-wave upward movement (black) that began in June. The top of the move was marked by bearish divergence in the daily RSI (green).
The $12.75 level is considered the first potential target for the bottom of this corrective wave. This level aligns with the Fibonacci retracement level of 0.382 and the support line of the short-term ascending parallel channel. Reaching this target would result in a 12% reduction from the current levels.
If LINK experiences a bearish breakout from the channel, it may drop by 20% to complete the fourth wave at the 0.5 Fib retracement level of $11.40.
Source: TradingView
Conversely, if LINK makes a bullish breakout from the channel, it would signify the beginning of the fifth wave. In such a scenario, the price could surge by 90% towards the next resistance at $27.
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