With a bearish pennant in the daily chart, the recovery rally in Chainlink teases a massive trend reversal. Will this reversal lead to a breakout run to $14?
As Bitcoin reclaims the $61,000 level, the broader market sentiment jumps, with the Fear and Greed Index up by 7%. Amid the top performers in the recovering market, Chainlink projects a buy low, sell high possibility with a breakout at the cusp. Will this breakout run in Chainlink prices skyrocket for a 40% rally this week?
Engulfing Candle in Chainlink hints at a Breakout Run
In the daily chart, Chainlink witnesses a shift in underlying sentiment, showing signs of a bullish recovery. After a massive 56% correction, the Chainlink price fell from $21.71 to $9.48, below the $10 psychological mark.
However, the recent recovery run has reclaimed the $10 level, with Chainlink now trading at $10.508.
In the short term, LINK’s price action forms a triangle pattern, which leads to a bearish pennant with the prevailing downtrend. Despite this, the ongoing recovery in Chainlink hints at a potential bullish breakout.
Over the past 24 hours, Chainlink has seen a 3.76% price increase, forming a bullish engulfing candle. This price action completes a morning star pattern within the triangle, challenging the overhead trendline.
The MACD indicator on the daily chart shows a bullish crossover, while the RSI line is trending upward, approaching the 50% mark.
The Early Signals in 4-hour Chart
A closer look at the 4-hour chart reveals that LINK is poised to break above the overhead trendline with a rounding bottom reversal. Chainlink has found consistent support at the $10 level, forming four consecutive bullish candles.
Additionally, LINK has surpassed the 20 and 50 EMAs on the 4-hour chart, hinting at a potential EMA crossover.
According to the Fibonacci retracement levels drawn from the correction phase in early August, LINK is heading toward the 50% Fibonacci level at $10.85. A bullish breakout at this critical point could strengthen market sentiment.
Looking ahead, if the bullish trend continues, LINK could challenge the high of $13.93, last seen on July 29. Based on the 1.618 Fibonacci level, a less optimistic target places the price at $8.859 for a correction.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
Source: https://thecryptobasic.com/2024/08/20/bull-run-in-chainlink-defies-pennant-eyes-key-fibonacci-level/?utm_source=rss&utm_medium=rss&utm_campaign=bull-run-in-chainlink-defies-pennant-eyes-key-fibonacci-level