Chainlink’s LINK token is displaying indications of transitioning from an accumulation phase to a markup phase, with the potential for a breakout beyond the $17 resistance and a target of $20 based on bullish momentum indicators.
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Chainlink’s LINK accumulation signals Price breakout
Over the past few months, Chainlink’s native token LINK has been consolidating tightly, confined between crucial support at $13 and formidable resistance at $17. Despite this, several signals are surfacing, suggesting that LINK might soon break free from this range as momentum builds for a markup phase.
Since November, LINK has been in a consolidation phase, moving from the distribution and markdown phases to what appears to be an accumulation structure. According to renowned analyst Richard Wyckoff, the accumulation phase involves stabilization, indecision, and prices ranging as sellers exit positions, setting the stage for a subsequent markup phase driven by buying pressure.
Technical Indicators for LINK
Technical indicators for LINK align with this potential scenario. The Awesome Oscillator is signaling bullish momentum with green histogram bars ascending toward positive territory.
Additionally, the MACD lines are on the verge of a bullish crossover, trending upward from their orange signal line. The Relative Strength Index is also leaning north, poised to cross above its parallel yellow signal line.
Supporting the bullish case, Chainlink’s 100-day and 200-day simple moving averages are comfortably positioned above the price action at $13.16 and $9.99, respectively. With these key averages pointing upward, the path of least resistance for LINK seems tilted to the upside in the short term.
Breakout on the Horizon
Buying pressure is evident near the current consolidation floor around $15.50. A breakout from this sideways structure could propel LINK to challenge the multi-month resistance at $17.
Notably, LINK saw a 17% rally in the past week, fueling optimism that it could breach this barrier. In an extremely bullish scenario, analysts suggest that LINK has the potential to surge as high as the psychological $20 mark, representing a 20% return from its current position.
On the downside, critical support lies at $13.33. A daily close below this level would negate the bullish outlook and pose a risk of declines toward the $12 zone. More distant support is situated at the 200-day SMA near $10 if bearish momentum persists.
Nevertheless, at present, LINK seems poised for upward continuation as it maneuvers within its accumulation base.
To conclude, Chainlink’s LINK accumulation has signaled a price breakout and the upcoming days will be crucial as traders observe whether Chainlink’s LINK can transform its consolidating phase into an impulsive markup phase. With LINK rallying near multi-month resistance, the anticipation is visible. A breakout could lead to significant market movements, while a breakdown would undermine the underlying buying momentum.
Note: It’s a research based article not a financial advice.
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